In December, China’s consumer price growth fell to A year-on-year increase of 0.1%Data released by the National Bureau of Statistics on Thursday raised deflation concerns.

The rise in headline inflation was in line with Reuters forecasts but down from November’s 0.2% increase. Data showed that core CPI, which excludes food and energy prices, rose 0.4% year-on-year, after rising 0.3% last month.

From a month-on-month perspective, China’s CPI remained flat, down 0.6% last month.

Official statistics showed that food prices fell by 0.6% month-on-month due to favorable weather conditions. The prices of fresh vegetables and fruits fell by 2.4% and 1% respectively. The price of pork, which accounts for a large part of the CPI basket, fell 2.1%.

“Weaker pork prices in 2025 will have a negative impact on overall CPI,” ANZ analysts wrote in a report. Compared with the same period last year, pork and fresh vegetable prices continued to remain high, rising 12.5%.

Wholesale prices fell for the 27th consecutive month, and China’s industrial producer prices fell 2.3% year-on-year in December. The data was slightly better than Reuters’ forecast of a 2.4% decline.

On a monthly basis, PPI fell 0.1% after rising 0.1% in November, as infrastructure and real estate projects were temporarily suspended during the off-season, affecting steel demand, the National Bureau of Statistics said.

Persistently near-zero consumer inflation suggests China continues to struggle with weak domestic demand, which is fueling the specter of deflation.

Consumption has failed to pick up despite a series of stimulus measures launched by Beijing since then last septemberThese include cutting interest rates, supporting stock and property markets and increasing bank lending.

Just Wednesday, China expanded its consumer trade-in program aimed at stimulating consumption by: Equipment upgrades and subsidies.

However, some indicators suggest that China’s economy may be recovering. of the country Factory activity has been expanding Although the pace of expansion slowed in December, growth has continued over the past three months.

Carlos Casanova, senior economist at private bank Union Bancaire Privée, said, “Although China’s economy shows some signs of recovery after September’s policy shift, it still faces significant challenges.” He listed China’s real estate sector faces headwinds as well as trade tensions with the United States.

Louise Loo, chief economist at Oxford Economics, expects China’s path to reflation to remain lower than most expect given continued weakness in consumer willingness to spend.

Chinese Onshore RMB On Wednesday, it hit a 16-month low of 7.3316 against the dollar as Treasury yields rose and the dollar strengthened.