China's consumer price index (CPI) declined 0.1% year-on-year in May, marking its first contraction since early 2023, according to data released Monday by the National Bureau of Statistics. The figure highlights shifting consumption patterns and subdued price pressures in the world's second-largest economy.
While food prices rose 1.0%, non-food categories saw a 0.4% decrease. Analysts note the dip reflects both seasonal factors and cautious consumer spending amid global economic uncertainties. 'This modest deflationary trend underscores the need for targeted stimulus measures,' said economist Li Wei of Shanghai Financial Institute.
The May figures follow April's 0.3% CPI growth, suggesting cooling demand in key sectors. However, industrial output and retail sales data due later this week are expected to show continued resilience in China's manufacturing-driven recovery.
Market watchers suggest the CPI movement could influence upcoming monetary policy decisions, particularly regarding support for small businesses and strategic industries. The statistics bureau emphasized stable fundamentals, citing 5.3% GDP growth in Q1 2024 as evidence of economic vitality.
