China’s consumer prices slid deeper into deflationary territory last month, suffering their biggest drop since the global recession in 2009 and underscoring the huge challenges facing the economy.
The country’s Consumer Price Index (CPI) dropped by 0.8% in January from a year ago, according to the National Bureau of Statistics (NBS) on Thursday. It was the steepest fall since September 2009 and marks a fourth straight month of decline.
But analysts say the sharp drop was largely due to seasonal factors and the downturn may have already bottomed out.
The NBS, as well as some economists, said holiday demand in January 2023, when CPI rose 2.1%, played a part in making prices this year look particularly weak.
“[The] Lunar New Year falls in February this year compared with the end of January last year, causing distortions to the base,” HSBC economists said in a research note on Thursday.
Beijing is scrambling to revive consumer and investor confidence as it fights fires on several fronts, including a rea