Today, Chinese authorities will release February’s consumer price index (CPI) data—the primary measure of inflation. Economists expect the CPI to
Today, Chinese authorities will release February’s consumer price index (CPI) data—the primary measure of inflation.
Economists expect the CPI to come in at 1.4%, down from 2.9% at the same point last year. Reduced consumption and falling energy and goods prices are likely contributing factors.
A lowered CPI is reflective of China’s slowing economy. Following a 6.6% growth rate in 2018—its lowest since 1990—Chinese Premier Li Keqiang announced on Tuesday it would target GDP growth of 6 to 6.5% this year, its lowest target in almost 30 years. In comparison, India is estimated to generate a GDP growth of 7.3% for 2019.
As the world’s second largest economy, China is expected to account for 19% of global economic activity this year. Thus, as China account’s for half of the world’s imports of pork, cement, copper, coal and steel, the prices of these goods will fall if Beijing purchases less.
Expect today’s CPI data to foreshadow China’s growth challenges ahead, which will likely impact global growth and markets.
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