CPI joined PPI in deflationary territory last month for the first time in more than a year. While this was partly driven by the usual price volatility around Lunar New Year, the January-February average was also negative, evidence of renewed deflationary pressures. With the National People's Congress underwhelming in terms of the scale and composition of fiscal support, we think that persistent structural imbalances will keep inflation low through 2025 and beyond.
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