Economy 28 minutes ago (Nov 08, 2022 08:52PM ET)
By Ambar Warrick
Investing.com– Chinese consumer inflation slowed more than expected in October, data showed on Wednesday, as renewed lockdown measures during the month, due to a resurgence in COVID-19 cases, presented fresh headwinds for the economy.
The (CPI) rose at an annualized 2.1% in October, lower than expectations of 2.4% and well below September’s reading of 2.8%, data from the National Bureau of Statistics showed. On a monthly basis, rose a scant 0.1%, below expectations for growth of 0.3%.
Factory gate inflation, or the fell 1.3% in the month, beating estimates for a drop of 1.5%. But the figure turned negative for the first time in a year.
China is facing cooling price pressures as a slew of COVID-related lockdowns ground economic activity to a halt this year. Factory gate inflation in particular has suffered the most, as COVID measures saw several manufacturing hubs being temporarily closed.
The country is now grappling with its worst COVID-19 outbreak since May, which has seen the reinstatement of curbs in several major hubs, including economic capital Shanghai.
The weak inflation readings also show that stimulus measures rolled out by the Chinese government are yet to reflect in economic growth.
While the Chinese economy in the third quarter, it still grew less than what was predicted by the People’s Bank of China.
Despite the economic slowdown caused by COVID-19 lockdowns, the Chinese government has so far given no indication that it plans to reverse the controversial policy. While reports last week suggested that the government was considering relaxing some measures, Beijing has so far established no clear timeline for the move.
A brewing property crisis also dented Chinese economic activity this year, as several major real estate developers faced a cash crunch and suspended construction activities. Consumers also grew wary of buying houses and taking out mortgages due to the crisis.
The weakened after Wednesday’s data, with its falling 0.3%.