Economy People in China have to spend a little more on shopping again
People in China are having to spend a little more on their shopping again. According to the statistics office in Beijing, the consumer price index (CPI) rose by 0.5 percent in July compared to both the previous month and July last year.
09.08.2024, 05:33
SDA
The inflation expected by analysts is fueling hopes that the weak demand among consumers in China could recover.
According to the statisticians, the heat and heavy rainfall in many parts of China in recent weeks had an impact on price trends. Fresh vegetables and eggs became more expensive. Prices for flights and hotels also rose during the current vacation season.
Beijing wants to boost demand
The political leadership in China has been worried about persistent deflation for some time. Such a fall in prices, i.e. the opposite of inflation, can appear positive to customers at the checkout at first glance. However, economists consider deflation to be more damaging to the economy, as companies lose revenue as a result, which can ultimately lead to wage cuts or job losses.
The world's second-largest economy has been battling deflationary pressure for some time due to its weak domestic consumption. Prices have hardly changed for months. Beijing wants to stimulate demand and recently presented a plan to promote gastronomy, care for the elderly, household services and tourism. However, this did not result in any real financial incentives to boost demand. On top of this, exports, which are important for China's economic performance, have recently risen less strongly than expected - probably also due to falling demand abroad.
