Growth Lags and Low Inflation in China

Published on Author mackayj17

New statistics coming out of China as the month of February closes do not look optimistic for Chinese markets.

Chinese expected figures for inflation and growth have been too high, often by a good margin. The producer price index declined at a rate of 4.8%, where officials predicted a drop of 4.3, correlating with an ongoing trend of deflation in that sector – a deflationary trend that is also seen in the economy as a whole. Additionally, Growth rates were reported at 7 percent – .5 percent below the nations goals.

Chinas energy sales have fallen recently, demonstrating the continued downturn in the nations PPI.

Inflation has remained low in China for some time. Since 2014 it has been under 3 percent, and is trending downwards. Economists are concerned about the ramifications of this deflation on the second largest economy, and the effects on global markets as a whole.

For now, while statistics are trending downwards, a crisis point has not been reached. This does not mean that China does not have a pressing concern to stabilize their economy in the future. We await more statistics to be released later this week, that will paint a more full picture of the status of the Chinese economy, but signs of the giant continuing to slow down have continued, and will probably be reinforced by this upcoming data.



One Response to Growth Lags and Low Inflation in China

  1. No refs to Mr. Miller and CBB?? And when the central item in deflation is the drop in food and commodity prices, but wages aren’t falling, is that really cause for worry?