China's Economy Not Experiencing Deflation, nor will It in the Foreseeable Future

On April 18, the State Council Information Office held a press conference to introduce the operation of the national economy in the first quarter of 2023.

At the meeting, in response to the deflation issue that has been hotly discussed in the market recently, Fu Linghui, spokesperson of the National Bureau of Statistics, said that in general, the current Chinese economy has not experienced deflation, and there will be no deflation in the foreseeable future.

Internationally, it is generally believed that the definition of deflation is a continuous decline in the general price level, often accompanied by a reduction in money supply and economic recession. However, in the first quarter, the consumer price rose by 1.3% year-on-year in the first quarter, maintaining a moderate rise.

The growth rate of broad money M2 at the end of March was 12.7%, maintaining a relatively rapid growth. In terms of economic growth, China's economy grew by 4.5% in the first quarter, which was a pick-up from the fourth quarter of the previous year, and there was no deflation on the whole.