In November, factory-gate prices in China fell annually for a second month but consumer inflation moderated, pointing to weak demand and sluggish activity in an economy that has been constrained by stringent economic controls.
Analysts stated that they anticipated the government to maintain low interest rates and implement measures to increase trust.
According to data released on Friday by the National Bureau of Statistics (NBS), the producer pricing index (PPI) was down 1.3% from a year earlier, maintaining the annual contraction witnessed in October. It fell at a slower rate than the 1.4% predicted in a Reuters survey.
Although it was less than the 2.1% annual increase observed in October, the consumer price index (CPI) for November increased at its slowest rate in eight months, at 1.6% from a year earlier. This result was in line with a Reuters poll.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, stated that the figures "indicate the economic momentum (continues) to decline."
Tuesday's high-level political meeting of the Politburo of the ruling Communist Party emphasized that the government would put its focus in 2023 on stabilizing growth, encouraging domestic demand, and opening up to the outside world.
Zhang stated that even though the government had loosened pandemic rules over the previous week, more steps would be taken to boost the economy.
Weak confidence was named as a significant issue for the economy at the Politburo meeting, he said. "I anticipate the government will take additional steps to increase consumer and market confidence, as evidenced by the haste with which it has resumed operations."
The unyielding COVID-19 limits, along with weakening global demand, have had a significant negative influence on the growth of the second-largest economy in the world this year.
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