China’s consumption slump deepens as February prices drop

Consumer prices in China fell for the first time since January 2024, according to official data released on Sunday, as the country’s efforts to revive domestic spending continue to face challenges.

The consumer price index (CPI), a key inflation indicator, dropped by 0.7 percent year-on-year in February, as per data from the National Bureau of Statistics (NBS). This marked a more significant decline than the 0.4 percent drop that had been forecasted in a Bloomberg survey.

The February drop reversed the 0.5 percent increase recorded in January, which had been driven by higher spending during the Lunar New Year, causing inflation to rise to its highest level in months.

Dong Lijuan of the NBS explained that the drop was largely due to factors such as the timing of the Lunar New Year, which shifted to a different month, along with fluctuating prices of international staple commodities and holidays impacting consumer behavior.