China's consumer price decline worsens, fuelling deflation fears

China's consumer prices fell at the steepest pace in three years while producer costs dropped even further into negative territory, underscoring the challenges facing economic recovery.

The consumer price index (CPI) fell 0.5 per cent in November from a year earlier, the National Statistics Bureau said in a statement on Dec 9.

That is the biggest drop since November 2020, and is more than the 0.2 per cent drop projected by economists in a Bloomberg survey.

Producer prices declined 3 per cent, compared with a forecast of a 2.8 per cent fall. Factory-gate costs have been mired in deflation territory for 14 consecutive months.

China has been struggling with falling prices for much of the year, contrasting with many other parts of the world where central banks are focused on taming inflation instead.