Raising concerns that China's huge economy is still pressed by weak demand, the nation's producer price index (PPI) declined by 2.9% on year in October, as reported by the National Bureau of Statistics (NBS) on Saturday. The PPI generally measures the price of goods 'at the factory gate' and is distinct from consumer price indices that measure prices charged in retail locations.
China's producer price index crested in June of 2022, but since then has steadily declined, as demand for industrial products in the nation has been sluggish. In October, China's PPI declined for the 25th month in a row, measured on year. In particular, the PPI sub-index for building materials and non-metals declined 6.7% on year in October, reflecting soft demand from China's struggling real estate sector.
In addition, producer prices fell in October in the oil and gas extraction, oil and coal processing, chemical products, and automobile-making sectors, as reported by the NBS. The soft producer prices reflect an economy not growing as quickly as Beijing would like. China's gross domestic product (GDP) expanded by 4.6% on year in the third quarter, a little below Beijing's annual target of 5% for 2024, as reported by officials. In recent months, Beijing has ushered in fiscal stimulus measures, while the People's Bank of China has lowered interest rates and cut reserve requirements for banks in bids to boost the nation's economy.
Over the weekend, Beijing unveiled a $1.2 billion debt-swap plan to deleverage local and state governments, allowing them to boost spending..