China, anti-Omicron restrictions curb inflation
Inflation in China rose at a slower pace than expected in December amid the restrictions against the Covid-19 outbreaks and the risks associated with the Delta and Omicron variants, and the fall in the prices of some commodities led by the central government , giving political and monetary authorities leeway for new measures to support the economy, including interest rate cuts. The consumer price index (CPI), reported the National Statistical Office, grew by 1.5% per year compared with the 1.8% expected and 2.3% in November, equal to the maximum from August 2020. In evidence, the drop in food (-1.2% from + 1.6% in November), which led to an economic downturn of 0.30%.
The producer price index (PPI), on the other hand, rose by 10.3%, to the lowest since August, against 11.1% expected and 12.9% in November, confirming a downward trend from the maximum of the last 26 years in October, raising concerns about global, as well as internal, repercussions due to China’s crucial role as an exporter. On a monthly basis, there was a decrease of 1.2%, while in the whole of 2021 the increase was 8.1%. Like most other countries, China has witnessed a rise in prices for much of 2021 due to rising energy costs, putting pressure on an economy also hit by the real estate crisis that in the last twenty years has contributed about a third to the composition of GDP.