From Yahoo Finance: 2025-04-09 21:40:00

China’s consumer prices fell for the second consecutive month in March, with factory-gate deflation worsening due to the escalating U.S. trade war. The CPI dropped 0.1% year-on-year, missing forecasts, while the PPI declined 2.5%. Core inflation edged up 0.5%, but consumption faces challenges amid external shocks.

The weak data comes amidst global economic turmoil as U.S. tariffs take effect. While President Trump partially walked back tariffs, tensions with China remain high. Capital Economics predicts further PPI declines due to commodity price drops and export hits. Core inflation rose, but consumption growth may be impacted.

China’s financial regulator urged lenders to ease consumer credit quotas to boost spending. Calls for more fiscal stimulus to support domestic demand amid trade tensions have been made. While policies are in place, uncertainties remain over consumption’s ability to offset weaker exports. Additional funding of 1-1.5 trillion yuan is expected mid-year.

Read more: China’s deflationary pressures persist as trade gloom worsens