China slips into deflation as consumer prices contracted last month for the first time in more than two years as slowing domestic spending weighs on the country’s post-Covid economic recovery
Deflation refers to falling prices of goods and services and is caused by a number of factors, including waning consumption. / Photo: Reuters Archive
China has slipped into deflation as consumer prices contracted last month for the first time in more than two years, official data showed, as slowing domestic spending weighs on the country's post-Covid economic recovery. The Consumer Price Index, the main gauge of inflation, fell 0.3 in July, the National Bureau of Statistics said on Wednesday, having flatlined in June.It is the second round of disappointing data for the Chinese economy this week after figures showed the country suffered its biggest fall in exports for more than three years.
Deflation refers to falling prices of goods and services and is caused by a number of factors, including waning consumption. And while cheaper goods may appear beneficial for purchasing power, deflation poses a threat to the broader economy.
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