Ekonomické zprávy
01.11.2021

China’s economy is showing signs of stagflation - economists

CNBC reports that Zhang Zhiwei, chief economist at Pinpoint Asset Management, said that there are signs of stagflation in China, as prices continue to rise while the latest manufacturing data show production slowing.

The official manufacturing PMI for October came in at 49.2, falling below the 50 level which separates expansion from contraction.

Zhiwei said the production index has dropped to the lowest level since it was published in 2005, excluding the 2008 global financial crisis and the Covid-19 outbreak in February last year.

In contrast, the output price index has risen to the highest level since it was published in 2016, Zhang said.

“These signals confirm that China’s economy is likely already going through stagflation,” he said.

“A worrying sign is the passthrough of inflation from input prices to output prices. The input price inflation has been high for many months by now, driven by the rising commodity prices,” Zhang wrote. “But the jump of [the] output price index in Oct is alarming.”

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