China’s consumer prices rose for the fourth consecutive month in January – although at a slower pace – while the decline in factory-gate prices continued to narrow, in a tentative sign that deflationary pressures in the Chinese economy may be starting to let up.
But analysts said a clearer picture of the outlook for inflation would only emerge in the coming months due to distortions caused by the Lunar New Year holiday, which typically brings a surge in demand that drives up prices.
The national consumer price index (CPI), a crucial gauge of inflation, rose 0.2 per cent year on year last month, according to data released by the National Bureau of Statistics on Wednesday.
The reading missed market expectations for a 0.44 per cent increase, according to a poll of economists by financial data provider Wind. It also represented a slowdown from December, when the CPI rose by 0.8 per cent year on year – the fastest growth recorded in nearly three years.
Dong Lijuan, a senior statistician at the bureau, attributed the muted CPI growth last month to the different timing of the Lunar New Year holiday – which fell in January last year, but takes place in February this year – and a retreat in global oil prices that dragged down energy prices.
But Dong stressed that core inflation – a metric that excludes volatile food and energy prices – remained on a “moderate upward trend” as consumer demand recovers. The core CPI rose 0.8 per cent year on year last month.