China Consumer Price Inflation Accelerates; Producer Price Deflation Deepens


China’s consumer price inflation increased in January with the rise in demand during the Lunar New Year holiday and the easing of Covid restrictions, while the decline in producer prices deepened due to falling commodity prices, official data revealed Friday.

Consumer price inflation rose to 2.1 percent in January from 1.8 percent in December, the National Bureau of Statistics reported Friday. This was slightly below economists’ forecast of 2.2 percent.

Food prices gained 2.6 percent, slower than the 4.8 percent increase in December. Prices of pork, a staple meat in China, grew 11.8 percent. At the same time, non-food price inflation climbed to 1.2 percent from 1.1 percent.

Excluding volatile food and energy prices, core inflation advanced to 1.0 percent from 0.7 percent.

On a monthly comparison, consumer prices gained 0.8 percent in January, slightly faster than the expected growth of 0.7 percent.

Capital Economics’ economist Julian Evans-Pritchard said he expects inflation to rise further in the near-term, though not by as much as in many other countries when they reopened. As such, inflation probably would not be a near-term constraint on the central bank’s ability to ease policy.

The economist anticipates further cuts to policy rates before long, the first of which might come as soon as next Wednesday.

Another report from the NBS showed that producer prices declined at a faster pace of 0.8 percent after easing 0.7 percent in December. Economists had forecast prices to drop 0.5 percent.

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