Inflation & Prices
Why China Is Struggling to Escape a Cycle of Deflation
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China’s spiral into deflation is proving hard to fix. Overall prices in the world’s second-largest economy have fallen for two straight years, and if they drop again in 2025 — as many analysts are predicting — it would mark the longest deflationary streak for the country since the 1960s.
Consumer prices across January and February of this year turned negative for the first time in four years. Core inflation — which excludes volatile items such as food and energy — decreased by 0.1% in February, only the second contraction in more than 15 years.