#deflation (good) vs deflation (bad comma chinese)

[zvaigzdelasas]

Inflation has pulled back significantly from its pandemic-era peak. In fact, some categories have fallen into outright deflation, meaning consumers are seeing the prices decline instead of rise.[...]

Demand for goods soared early in the Covid-19 pandemic, as consumers were confined to their homes and couldn't spend on things such as travel or concerts. The health crisis also snarled global supply chains, meaning volume couldn't keep pace with demand for those goods. Such supply-and-demand dynamics drove up prices.

Now, they're falling back to earth.[...]

"Supply chains are going back to normal," said Jay Bryson, chief economist for Wells Fargo Economics. "And on the demand side, there's been somewhat of a rotation from goods spending back toward services spending."

"We're kind of reverting back to the pre-Covid era," he added.[...]

14 Feb 24

Deflation may soon start biting into Chinese growth, as Beijing looks at another three to six months of a "very painful economy," according to one analyst who covers the country.

"This is something investors need to be cautious of. The economy here is bad, it's pretty ... it's really bad. I've been in China for 27 years, and this is probably the lowest confidence I've ever seen," Shaun Rein, founder of the China Market Research Group, told CNBC's "Squawk Box Europe" on Monday.

“So deflation is starting to wield its ugly head[sic]. Consumers are waiting for discounts. They’re very nervous.”

Linked to a decline in the prices of goods and services, deflation is generally associated with an economic slowdown — raising questions over the growth outlook for China, whose post-Covid-19 recovery has already fallen short of some expectations in 2023. In December, depressed prices for pork — which makes up around a fifth of China’s CPI basket — heralded the possible advent of deflation.

“Deflation is a serious issue, I know the Chinese government doesn’t want me saying it, but it’s an issue that we need to be worried about,” Rein stressed. [...]

Economic slowdown is widely seen as a potential threat to Xi Jinping, whose Chinese Community Party has cultivated national political legitimacy through rapid growth.[...]

″[Buyers] think housing prices might continue to drop, so even if there’s pent-up demand for housing, a lot of home buyers are telling us, we’re not going to buy this month, we’re not going to buy this quarter, because we’re scared prices are going to drop another couple [of] percent in the coming months,” Rein said Monday.

22 Jan 24

Curious 🤔

#deflation (good) vs deflation (bad comma chinese)