People wearing face masks move packs of vegetables at a wholesale market for agricultural products, as the country is hit by an outbreak of the novel coronavirus, in Beijing, China February 19, 2020.
Tingshu Wang | Reuters
BEIJING — China’s consumer price index fell in November for the first time in about a decade as food prices dropped.
The consumer price index, a measure of inflation that tracks prices for a basket of consumer goods and services, fell 0.5% in November from a year ago, China’s National Bureau of Statistics said Wednesday.
The decline marked the first drop since October 2009, according to the Wind Information database.
China CPI from 2005 to 2020
Food prices fell 2% as pork prices declined 12.5% in November from a year ago.
The drop in prices for the Chinese meat staple follows a surge in the last year due to a shortage of pork as a result of an African swine fever outbreak.
The sharp increase in pork prices in the last three months of 2019 makes November’s drop less meaningful, Ting Lu, chief China economist at Nomura, said in an email. “The negative (year-on-year) inflation does not mean deflation for China,” he said.
Economists did not expect major changes in monetary policy from the People’s Bank of China as a result of the drop in CPI.
The so-called core CPI — which excludes food and energy prices — rose 0.5% in November from a year ago. Medical care prices rose 1.5%, while that of education, culture-related activities and entertainment rose 1%, according to the statistics bureau.
The producer price index, which measures prices of goods and services from the perspective of sellers, fell 1.5% in November from a year ago. That was 0.6 percentage points less of a decline versus October’s figure, the statistics bureau said.
“The underlying economy is strong given the narrowing PPI deflation,” Larry Hu, chief China economist at Macquarie, said in an email. As a result, he expects China’s central bank will look past the overall drop in consumer prices and focus on reducing some stimulus.
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