Prices in China Fall for First Time in Over a Year

Consumer prices in China fell in February, the first time in 13 months.

According to the Associated Press, the reduced prices represent persistent weak demand, compounded by the early timing of the Lunar New Year holiday.

The National Bureau of Statistics said Sunday that the consumer price index dropped 0.7 per cent in February compared with a year ago.

On a monthly basis, prices were down 0.2 per cent from January.

While many other countries wrestle with inflation, China’s policymakers face flat-to-falling prices, and the possibility they could evolve into a deflationary spiral that would drag down the economy.

The government stressed the need to increase domestic demand and consumer spending in an annual report last week to its ceremonial legislature, the National People’s Congress.

It, however, held back on unveiling any dramatic new steps to boost the economy.