China’s ‘bad’ inflation still better than deflation, says ANZ in World Economy News 10/04/2026 China is likely to emerge from its prolonged deflation cycle sooner than markets expect, with a return to positive price indicators, although the recovery may come with challenges, ANZ analysts said in a note on Wednesday. ANZ said it expects China’s producer price index (PPI), consumer price index (CPI) and GDP deflator to all turn positive year-on-year in the first quarter of 2026, with the GDP deflator seen rising about 0.5%, marking its first expansion in three years. The shift is largely driven by imported inflation, particularly from higher energy prices, which analysts described as “bad” inflation because it could squeeze already weak consumption and industrial profitability. However, ANZ said such inflation is still preferable to deflation, which has been driven by a persistent imbalance between supply and demand in the Chinese economy. “China possesses significant expertise and resources in managing costs, but the ability to boost consumption is limited,” ANZ analysts said, noting policymakers are better equipped to handle rising costs than falling prices. The bank said higher oil prices may support demand in select sectors such as renewables, but are unlikely to resolve broader economic imbalances, while also weighing on household spending. Policymakers are expected to rely on a range of tools to manage inflation pressures, including administrative controls, use of strategic petroleum reserves, fiscal subsidies, and efforts to diversify energy imports. ANZ added that China is likely to continue pursuing supply-side reforms under its reflation strategy, aiming to end the deflation cycle as part of efforts to build a more unified national market. Source: Investing.com 2026-04-10 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share