China’s Deflation Shows Domestic Demand Is Big 2024 Challenge
- Economists see deflation persisting due to property weakness
- China entered ‘liquidity trap’ back in 2022, Barclays says
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China’s latest batch of data featured continued declines in consumer prices, flat import growth, and a slowdown in the pace of lending — all suggesting sluggish domestic demand will again top the nation’s economic challenges in 2024.
Adding to concerns: economists are pessimistic about whether Beijing’s response to the challenge will prove sufficient. While they see officials responding with monetary easing, the impact may be limited by low confidence levels and a struggling real estate sector. That leaves fiscal policy, but China’s government isn’t scheduled to make its full spending plans clear until March.