The People’s Bank of China, the National Bureau of Statistics, and other government agencies have dismissed deflation fears.

Similarly, Chinese analysts avoid discussing deflation in public.

This year’s low prices were caused by the pandemic’s inventory accumulation and optimism after Covid restrictions were lifted.

Some economists forecast that consumer inflation will remain low for a few more months before rising toward the end of the year as the larger base of comparison from the previous year diminishes and domestic demand increases.

Central bankers have proposed easing measures, such as reducing reserve requirements for banks.

The continued weakness in China’s economic data will continue to dampen consumption, as households will remain hesitant to make large expenditures due to the possibility of job losses and salary reductions.