China sees deflation in July for the first time in a year

In July, deflation was recorded in China for the first time in a year, prices in the country fell by 0.3% in annual terms. About it informs State Statistical Office (Gosstat) of the Republic.

Food products fell in price by 1.7%, consumer goods – by 1.3%. At the same time, prices for non-food products remained unchanged, while the cost of services increased by 1.2%. At the same time, compared with June in July, inflation in the country amounted to 0.2%, the State Statistics Service noted.

In annual terms, prices for food, tobacco and alcohol decreased significantly (-0.5%), in particular, meat prices fell by 14%, vegetable oil – by 1.3%, fresh vegetables – by 1.5%, and eggs – by 0.5%. Prices for household appliances decreased by 1.8%, and for transport and communications – by 4.7%.

The state of the Chinese economy has deteriorated during the coronavirus pandemic. Financial Times writesthat consumer prices in China fell in July for the first time since February 2021. The newspaper notes that the republic has been on the verge of deflation for several months, since after the lifting of coronavirus restrictions, consumer spending did not recover, as expected by the authorities.

China’s inflation target is set at 3%. In 2022, consumer price growth in the country amounted to 2%.