The National Bureau of Statistics will release February's price data at 9:30 AM on March 9. Institutions believe that the Spring Festival effect will drive a significant year-on-year rebound in the national Consumer Price Index (CPI) for February, while rising nonferrous metal prices will continue to support an increase in the national Producer Price Index (PPI).
Influenced by the Spring Festival effect, February's CPI is projected to see a notable rebound. According to the National Bureau of Statistics, in January 2026, CPI rose 0.2% year-on-year and increased 0.2% month-on-month. Multiple institutions forecast a clear rebound in the year-on-year growth rate of CPI for February. Predictions from China Merchants Macro, the MINSHENG BANK chief economics team, Huatai Securities Macro Research, Hua Chuang Securities, and Zhejiang Merchant Securities Macro Research team are 1.2%, 1.3%, 0.9%, approximately 0.9%, and 0.7%, respectively.
Hua Chuang Securities suggests that the year-on-year CPI for February may rebound sharply, primarily driven by the timing shift of the Spring Festival and rising oil prices, creating a "mirror image" of the decline observed in January. Firstly, the Spring Festival holiday fell in the second half of February, leading to increased travel and entertainment demand coupled with reduced labor supply. This is expected to keep related service prices on an upward trend, compounded by a lower base from the same period last year. Secondly, domestic gasoline retail prices rose by approximately 3.2%, influenced by international oil price movements.
Regarding core CPI, the MINSHENG BANK chief economics team indicates that the expansion in core CPI growth is mainly due to the Spring Festival holiday effect. Business activity indices for sectors such as residential accommodation, catering, culture, sports, and entertainment all remained in high expansionary territory above 60.0, while indices for retail and air transport rose above 52.0, suggesting upward pressure on service prices. Additionally, due to high tourism activity during the Spring Festival holiday in some cities, short-term rental demand increased, leading to a narrowing of the month-on-month decline in average residential rents across 50 cities.
Rising nonferrous metal prices continue to support the upward movement in PPI. According to the National Bureau of Statistics, in January 2026, PPI fell 1.4% year-on-year, with the rate of decline narrowing by 0.5 percentage points from the previous month. On a monthly basis, PPI rose 0.4%, accelerating by 0.2 percentage points. Several institutions anticipate a narrowing in the year-on-year decline of PPI for February. Forecasts from China Merchants Macro, the MINSHENG BANK chief economics team, Huatai Securities Macro Research, Hua Chuang Securities, and Zhejiang Merchant Securities Macro Research team are -1.2%, -1.2%, -1.1%, approximately -1.2%, and -1.2%, respectively.
China Merchants Macro points out that escalating geopolitical tensions in the Middle East led to a significant rebound in international oil prices in February, with domestic refined oil prices also being adjusted upwards twice. The pull effect of these factors on PPI is gradually becoming apparent. Meanwhile, against a backdrop of structural supply-demand tightness and geopolitical instability, nonferrous metal prices continued to rise significantly year-on-year in February, remaining an important support for PPI growth. However, domestic manufacturing and construction sectors were in their off-season in February, leading to adjustments in prices of domestically-traded coking coal and chemical products, while the cement price index also experienced a slight decline. On the other hand, prices of polysilicon and lithium carbonate, which represent the emerging economy, continued to improve, and their pull effect on PPI may be significantly stronger than that of traditional industrial goods.
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