China CPI Falls Again, Policymakers Eye Fiscal Moves

China's consumer price index fell 0.1% year-on-year in April for the third consecutive month, signaling continued deflationary pressures amid a prolonged US-China trade war and ongoing weakness in domestic spending and real estate. The producer price index dropped 2.7%, marking the sharpest decline in six months, as both export and local demand remained weak. Food prices declined, while prices for services and some goods saw modest gains, resulting in a 0.5% year-on-year increase in core inflation excluding food and fuel. Global investment banks have downgraded China's GDP growth forecasts to below the official 5% target. As U.S. and Chinese officials begin new trade talks, hopes have risen for tariff reductions, but business and consumer confidence remain low. Policymakers are expected to introduce additional fiscal measures to stimulate consumption and address the risk of continued deflation.