Part 2/8:
One of the main concerns observed throughout the year was the fear of a deflationary spiral. Prices for goods leaving Chinese factories have taken a downward turn for 26 consecutive months, with significant reductions noted as of November 2024, where prices dropped 2.5% compared to the previous year. More troubling is the consistent negative territory of China’s gross domestic product deflator, marking the longest stretch since the 1990s. Predictions from economists suggest that deflationary pressures may persist at least into 2025, indicating entrenched expectations for lower prices, which complicate the use of macroeconomic stimulus measures.