China’s consumer inflation rate unexpectedly flatlined in September while producer prices continued to fall, adding to concerns about whether more support is needed to sustain economic growth.
The consumer price index was unchanged last month from a year earlier, the National Bureau of Statistics said Friday, weaker than expectations for a slight increase.
Producer prices fell 2.5% after a 3% decline in August. Factory-gate deflation has persisted for the last year, though it has been easing in recent months.
The flat consumer prices in September were due to a high base of comparison with last year, said Dong Lijuan, chief statistician with the NBS, in a statement accompanying the data. She attributed slower growth in food prices to ample supply before the Golden Week holiday.
The data comes amid lingering concern over China’s economy, which still faces drags from a property crisis and weak confidence — issues that are weighing on everything from stocks to commodity prices. Chinese consumers traveled and spent less over Golden Week than the government had hoped, while lukewarm home sales stirred concerns about whether more support will be needed to bolster growth.
Earlier this week, Bloomberg News reported that the government is considering raising its budget deficit for the year as part of a plan to spend more on infrastructure — a form of stimulus to help the economy meet an official growth target of about 5%.
The IMF recently cut its growth forecast for China for this year to 5% from 5.2%, and for next year to 4.2% from 4.5%. The economy is losing momentum because of declines in real estate investment and housing prices that endanger government revenues from land sales, as well as weak consumer sentiment, according to the Fund.
