Producer prices in China showed signs of recovery in December, with the pace of decline easing, while consumer inflation saw a modest increase in 2024, signalling stabilisation in the world’s second-largest economy.

Data released on Thursday by the National Bureau of Statistics revealed that the producer price index (PPI), which tracks factory gate prices, dropped 2.3% year-on-year in December, an improvement from November’s 2.5% decrease.

For 2024 as a whole, China's PPI fell by 2.2%, an improvement compared to the 3% decline recorded in 2023, Shine News reports.

NBS statistician Dong Lijuan attributed the drop to factors such as seasonal slowdowns in production across certain industries and the effects of fluctuating international commodity prices.

Key contributors to the PPI decline last year included petroleum, coal, and other fuels processing, which dropped 8.7% year-on-year, and oil and natural gas extraction, which fell 6.2%. However, both sectors, along with others, experienced smaller declines compared to the previous month. 

Despite pressures from fluctuating international commodity prices and domestic industry-specific challenges, China’s industrial sector is showing signs of recovery, NBS spokesperson Fu Linghui commented in December.

In addition, Fu highlighted that newly implemented macroeconomic policy measures are beginning to yield results, with certain sectors seeing price stabilisation, potentially improving business conditions for enterprises. 

Meanwhile, China’s consumer price index (CPI), a key measure of inflation, increased by 0.2% year-on-year in 2024, according to the NBS.

Last month, the CPI increased by 0.1% compared to the previous year. The core CPI, which excludes food and energy prices, rose by 0.4% year-on-year in December, a slight increase from the 0.3% rise recorded in November.