China's consumer inflation slows further in December, stoking deflation worries

China's consumer price inflation in December slipped to 0.1% year on year, data from the National Bureau of Statistics showed Thursday, stoking deflation concerns.

Growth in headline inflation was in line with Reuters estimates, but less than the 0.2% rise in November. Core CPI, which excludes food and energy prices, rose 0.4% year on year compared with 0.3% rise in the previous month, the data showed.

On a month-on-month basis, China's CPI came in flat, compared with the 0.6% decline in the prior month.

Food prices declined by 0.6% month on month as a result of conducive weather conditions, official statistics showed. The prices of fresh vegetables and fruits fell 2.4% and 1%, respectively. Prices of pork, which makes up a significant portion of the CPI basket, fell 2.1%.

"Headline CPI will be negatively impacted by the weaker pork price in 2025," analysts at ANZ Bank wrote in a note. On a year-on-year basis, pork and fresh vegetable prices remain elevated, climbing 12.5%.

Wholesale prices continued to be fall for a 27th straight month, with China's producer price inflation down 2.3% year on year in December. The reading was slightly better than Reuters' estimates of a 2.4% decline.

On a monthly basis, PPI dipped by 0.1% compared to a 0.1% increase in November, as infrastructure and real estate projects were temporarily suspended during the off-season, the National Bureau of Statistics said, hurting demand for steel.

The ongoing near-zero consumer inflation indicates that China continues to struggle with weak domestic demand that has raised the specter of deflation.

Consumption has failed to pick up despite a range of stimulus measures introduced by Beijing since last September, which has included interest rate reductions,