BEIJING, May 15 Reuters Utility price hikes in more than 10 Chinese cities may briefly lift nationwide inflation from ultralow levels, but could ultimately turn into a deflationary force in the world39;s no. 2 economy as they further erode the households39; spending power, analysts say.

Many economists have said boosting household demand is crucial for China to avoid a Japanlike prolonged period of meagre growth and deflation in the long run, calling for policies that transfer economic resources to consumers.

But such measures are a difficult proposition for indebted local governments, saddled with 13 trillion in debt as a relentless fight against COVID19 and plunging land auction revenues due to a property market crisis have depleted their coffers.

The large tech and manufacturing hubs of Shenzhen and Guangzhou, and other cities in China, have in recent months increased or flagged plans to raise water or gas prices. Tickets on four of the busiest highspeed railway routes will also rise by up to 20 from June 15, state media reported.

The increases have prompted criticism on social media from users who say they will have less to spend on other basic needs.

While the hikes might help keep China39;s consumer price growth in positive territory in coming months, the uptick is largely supplydriven meaning the impact will disappear after a year due to statistical effects, leaving behind only the negative consequences on demand, analysts warn.

The utility cost rally will…