Producer prices in China decline, while consumer inflation slows due to weak demand.

While consumer inflation slowed in November, factory-gate prices in China continued to decline annually. This indicates poor activity and tepid demand in an economy that has been constrained by stringent financial controls.

Analysts predicted that the government will maintain low interest rates and take steps to increase confidence.

According to National Bureau of Statistics (NBS) statistics released on Friday, the producer pricing index (PPI) was down 1.3% from a year earlier, maintaining the annual drop witnessed in October. This was less drastic than the 1.4% decline predicted in a Reuters poll.

The consumer price index (CPI) increased 1.6% from a year earlier in November, which was slower than the 2.1% annual increase observed in October but in line with a Reuters poll. This was the slowest rate of growth in eight months.

The economic momentum (continues) to diminish, according to these figures, according to Zhiwei Zhang, chief economist at Pinpoint Asset Management.

Tuesday's high-level political meeting of the Politburo of the ruling Communist Party emphasized that in 2023 the government will prioritize stabilizing growth, fostering domestic demand, and expanding its international relations.

Zhang stated that despite loosening pandemic rules over the previous week, the government would still take other steps to boost the economy.

He claimed that the Politburo had "recognized weak confidence as a serious challenge for the economy." "The rapid speed of reopening demonstrates the administration's sense of urgency. I think the government will do more to improve market and household confidence."

Due to the unyielding COVID-19 limitations and waning global demand, growth in the second-largest economy in the world has slowed this year.