(Beijing) China remained in deflation in January, for the fourth consecutive month and contrary to the main economies plagued by inflation, according to official figures published Thursday.
The Consumer Price Index (CPI), the main gauge of inflation, fell 0.8% year-on-year in January, compared to -0.3% the previous month, the National Bureau of Statistics said ( BNS).
China slipped into deflation in July for the first time since 2021. After a brief rebound the following month, prices have been in constant decline since September.
Analysts surveyed by the Bloomberg agency anticipated a less severe decline in prices in January (-0.5%).
While on paper this phenomenon may seem a good thing for purchasing power, deflation is a threat to the economy as China recorded one of the lowest growth rates in three decades last year (+ 5.2%).
Due to a lack of demand, companies are forced to reduce their production and agree to new discounts to sell off their stocks.
This situation, which weighs on their profitability, pushes them to freeze hiring or to lay off employees.
Economists speak of a harmful spiral, because this phenomenon is an additional brake on consumption.
Inflation in China over the whole of 2023 increased by an average of 0.2%, far from the rates recorded in the main economies, such as in France where it reached 4.9%.
For its part, the producer price index contracted again in January (-2.5%) for the 16e consecutive month, according to the BNS.
This index, which measures the cost of goods leaving factories and gives an overview of the health of the economy, was already down 2.7% in December.
Over the whole of 2023 it fell by 3%.
Producer prices in the red are synonymous with reduced margins for companies.