China’s economy under pressure as inflation drops at fastest pace in 14 years

China’s consumer prices fell last month at the fastest pace since the global financial crisis, piling pressure on the government to step-up support for a stumbling economic rebound that’s roiling markets, Report informs referring to Bloomberg.

The consumer price index dropped 0.8% in January from a year ago, the National Bureau of Statistics said Thursday, the weakest since September 2009. The drop was worse than economists’ expectations for a 0.5% decline.

“The CPI data today shows China faces persistent deflationary pressure,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management Ltd. “China needs to take actions quickly and aggressively to avoid the risk of deflationary expectation to be entrenched among consumers.”

The producer price index fell 2.5%, marking 16 straight months of deflation for factory-gate costs.

The latest data comes as calls mount for China to do more to stimulate the economy and reverse a stock market slide. Confidence in the world’s second-largest economy has flagged despite efforts by the government to add stimulus, including measures such as unleashing long-term cash for banks and issuing more government bonds to fund construction projects.

China has also taken a slew of moves to arrest the $5 trillion equities selloff. President Xi Jinping was set to get a briefing from regulators on the rout, Bloomberg News reported earlier this week. Underscoring the urgency, Beijing ousted the head of the nation’s main securities regulator, sending shockwaves across the industry.

The benchmark CSI 300 Index rose 0.4% on Thursday, in line for a fourth day of gains. The yuan was little changed at 7.1945 per dollar.