Data released by the National Bureau of Statistics on February 11 showed that in January, consumer demand continued to recover. The national Consumer Price Index (CPI) increased by 0.2% year-on-year and rose by 0.2% month-on-month. The Producer Price Index (PPI) fell by 1.4% compared to the same period last year, narrowing the decline by 0.5 percentage points from the previous month. On a monthly basis, PPI increased by 0.4%, with the growth rate expanding by 0.2 percentage points from the prior month.
Dong Lijuan, Chief Statistician of the Urban Department of the National Bureau of Statistics, analyzed that although CPI continued to rise in January, the year-on-year growth rate moderated. This slowdown was attributed to two main factors: the timing of the Lunar New Year, which fell in January of the previous year, leading to a higher base effect due to elevated food and service prices at that time; and a decline in international oil prices, which contributed to a larger drop in energy costs.
Specifically, food prices decreased by 0.7% in January, pulling down the year-on-year CPI growth by approximately 0.11 percentage points. In contrast, food prices had contributed a 0.21 percentage point increase in the previous month. Service prices rose by 0.1%, adding about 0.05 percentage points to the year-on-year CPI growth, though this contribution was 0.20 percentage points lower than in December.
Energy prices dropped by 5.0% year-on-year, dragging down the CPI by around 0.34 percentage points, with gasoline prices falling by 11.4%, a decline that widened by 3.0 percentage points from the previous month.
Core CPI, which excludes food and energy prices, maintained a moderate upward trend. In January, core CPI increased by 0.8% year-on-year and rose by 0.3% month-on-month, reaching the highest level in six months.
Liu Fang, a researcher at the Market and Price Research Institute of the National Development and Reform Commission, noted that core CPI, by filtering out short-term fluctuations in food and energy prices, serves as a more reliable indicator for observing medium- to long-term inflation trends and macroeconomic supply-demand dynamics. The sustained moderate rise in core CPI reflects continued recovery in consumer demand, improved effectiveness of macroeconomic policies, and the advantages of China's large domestic market.
Supported by ongoing efforts to build a unified national market and increased demand in certain sectors, PPI showed positive changes in January. The index rose by 0.4% month-on-month, marking the fourth consecutive monthly increase, with the growth rate accelerating by 0.2 percentage points from December. Prices in sectors such as cement manufacturing and lithium-ion battery production have risen for four months in a row.
Dong Lijuan pointed out that rising demand in specific industries further drove up prices. For instance, accelerated development in digital technologies such as artificial intelligence and growing demand for computing power pushed up prices in the computer, communication, and other electronic equipment manufacturing sector by 0.5% month-on-month. Increased pre-holiday demand for gifts and food contributed to price increases of 4.1% in arts, crafts, and ceremonial goods manufacturing and 0.3% in agricultural and food processing.
Liu Fang added that with enhanced counter-cyclical and cross-cycle adjustments, continued progress in building a unified national market, and improving employment and income expectations, domestic demand potential is expected to be further unleashed, providing support for prices in related industries.
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