Goldman Sachs lowers China's inflation forecasts as November data shows weak consumer prices
China's inflation data for November showed a Consumer Price Index (CPI) increase of 0.2%, below the expected 0.5%. The Producer Price Index (PPI) fell by 2.5%, also better than the forecast of -2.8%. Goldman Sachs has revised its inflation projections for China in 2025, predicting CPI inflation at 0.8% and PPI inflation at 0%. This contrasts with the consensus estimates of 1.2% and 0.4%, respectively. Household consumption's contribution to GDP dropped to 29% in Q3 2024, down from 47% in Q2. Policymakers have introduced measures to support the economy, but the effectiveness of these stimulus efforts remains uncertain.