Posted 12/9/2023, 3:10:00 PM
China Faces Steepest Consumer Price Drop in 3 Years Amid Broader Deflation Concerns
- Consumer prices in China fell 0.5% in November compared to a year earlier, the steepest decline in 3 years
- Producer prices declined 3%, showing continued deflationary pressures
- Falling prices contrast with rising inflation in many other parts of the world
- Deflation can lead to lower consumption, production, and investment if consumers and businesses expect prices to keep falling
- To boost the economy, China has turned to fiscal measures like increasing budget deficits to support infrastructure spending