Micah McCartney is a Newsweek reporter in Taipei, Taiwan. It covers U. S. -China relations, East and Southeast Asian security issues, and China-Taiwan trait-to-line ties. You can tap on Micah by emailing M. McCartney@newsweek . com.
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China may face its longest deflationary cycle since the 1960s, he was warned, as policymakers pinned their hopes on implementing measures to spice up the world’s second-largest economy.
Newsweek reached out to China’s National Bureau of Statistics with an emailed request for comment.
China has struggled to stabilize its economy since the end of President Xi Jinping’s strict pandemic-era “zero” lockdown, through headwinds such as a depressed property market, a sector that accounts for up to 70% of household wealth. And economic uncertainty has kept consumers wary, driving even further.
While China’s Bureau of Statistics said the country delivered its target gross domestic product (GDP) expansion after stronger-than-expected fourth-quarter functionality on Friday, analysts point to deflation, which in 2024 continued for a consecutive time. a long-term risk to recovery.
The median forecast from a Bloomberg ballot of 15 analysts estimated that the GDP deflator — a broad metric of valuable adjustments in an economy — will succeed by 0. 2% this year.
The GDP deflator, which measures replacement in value grades by comparing nominal GDP (adjusted for inflation) to genuine (constant) GDP, will succeed at -0. 2% this year, with average annual construction of 3. 4% in the decade before the pandemic.
The Bureau of Statistics reported a 0. 2% construction in the consumer price index (CPI) for 2024. It indicates some progress in raising prices, but it is not below inflation grades as Beijing seeks to revitalize domestic appeal and economic momentum.
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The country hit its GDP target of around 5% last year, with a better-than-expected expansion of 5. 4% in the fourth quarter. However, many economists, former No. 2 Keqiang of China, have cast doubt on China’s official expansion figures, a sensitive issue for Xi Jinping and one that has led some economists to hot water.
Frederic Neumann, Lead Asia Economist at HSBC Holdings Plc in Hong Kong, told Bloomberg: “The stimulus, the stimulus, the stimulus, especially on the fiscal side, is very much in China. We have noticed in other economies a strong policy momentum. it is to leave permanently.
Disinflation is a minimization in inflation.
Kang Yi, director of China’s National Bureau of Statistics, said: “There have been positive adjustments in the value situation. Have an effect on food values, reflecting the dating between the source and the call for the highest central CPI for 3 consecutive months. “
The move comes ahead of the Lunar New Year, a time when many Chinese consumers splash gifts for members of the circle of relatives, as well as trips to the stop in their hometowns or vacation spots in China and beyond.
China’s leaders hope the $1. 4 trillion stimulus package announced in September will put the economy on the firmest floor this year, and Xi has called for more proactive measures going forward.
Update 17/01/24, 7:20 a. m. ET: This article has been updated with more information.
Micah McCartney is a Newsweek reporter in Taipei, Taiwan. It covers U. S. -China relations, East and Southeast Asian security issues, and China-Taiwan trait-to-line ties. You can tap on Micah by emailing M. McCartney@newsweek . com.
Micah McCartney is a Newsweek reporter in Taipei, Taiwan. It covers U. S. -China relations, East and Southeast Asian security issues, and China-Taiwan trait-to-line ties. You can tap on Micah by emailing M. McCartney@newsweek . com.