Hong Kong CNN  — 

The Chinese economy has slipped into deflation, with consumer prices falling for the first time in more than two years in another sign of weakening demand.

The consumer price index (CPI) fell by 0.3% in July from a year ago, according to China’s National Bureau of Statistics on Wednesday. That’s the first time the index has fallen since February 2021.

The cost of food, transportation, and household goods all declined in July. In particular, pork prices were down 26%, and vegetable prices were down 1.5%.

The producer price index (PPI), which measures goods prices at the factory gate, also dropped by 4.4% in July from a year earlier. It was the 10th straight month that the index has contracted.

Signs of deflation have become more prevalent in the world’s second biggest economy in recent months, sparking concerns that China could enter a prolonged period of stagnation.

The economy barely grew in the April to June period compared with the previous quarter, as an initial burst in economic activity triggered by the lifting of pandemic restrictions late last year faded. China is also suffering from a prolonged slump in its real estate sector, and weak trade.

— This is a developing story and will be updated.