Charting the Global Economy: Deflation Concerns Mount in China

Deflation stalking China since last year is now showing signs of spiraling, threatening to worsen the outlook for the world’s second-largest economy and raising calls for immediate policy action.

Receding inflation and growing economic concerns prompted the European Central Bank to lower interest rates a quarter point for the second time this year. Clues on the timing of the next cut were in short supply on Thursday, with President Christine Lagarde and colleagues awaiting data on how drastically the economy is deteriorating — and how that will shift inflation.