China’s consumer price index (CPI) in May grew by 0.3 per cent year on year, remaining below the government target, indicating low inflation. This contrasts with Western countries experiencing higher inflation rates and hints at potential deflation due to sluggish consumption post-pandemic.
The producer price index (PPI) declined for the 20th consecutive month in May by 1.4 per cent year on year, further underscoring economic challenges. Food prices are expected to maintain deflationary trends, while some sectors like public services may witness price increases to offset costs and financial pressures.
Despite a slight uptick in consumer and service prices during the May Day holiday travel period, experts anticipate minimal changes in CPI in the near future due to weak domestic demand. The situation calls for continued monitoring to assess the impact on China’s economic landscape.