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China Consumer Price Growth Eases, Reflecting Caution on the Economy

China's inflation eases for a second month, rising just 0.7% YoY, amid cautionary signals in the strength of China's recovery as it emerges from Covid-19 controls, keeping a lid on domestic spending.

1 min read
  • China's inflation eased for the second consecutive month in March, with consumer prices rising just 0.7% YoY, the lowest rate since September 2021.
  • Weakness in the labor market, high unemployment among young people, and cautious domestic spending are keeping a lid on price growth.
  • Economists expect around 4% YoY growth in Q1 compared to 2022, with the government targeting around 5% growth for 2023.
  • The slowdown in inflation means the People’s Bank of China should have more space to support economic recovery with easy money policies.
  • The easing of Covid controls in China is not generating broad price pressures in contrast to the US and other major economies.
China Consumer Price Growth Eases, Reflecting Caution on the Economy
While the scrapping of Covid controls has opened up the economy, joblessness and an uncertain outlook have kept a lid on domestic spending
WSJJason Douglas

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