In the first quarter of the year, regional authorities and government departments have earnestly implemented the decisions and arrangements made by the Central Committee of the Communist Party of China and the State Council. More proactive and effective macroeconomic policies have been rolled out, alongside deeper advances in building a unified national market. This has led to optimized production and supply structures, steadily growing market demand, a mild rise in consumer prices, and a gradual recovery in production sector prices.
I. Mild Increase in Consumer Prices The Consumer Price Index (CPI) increased by 0.9% year-on-year in the first quarter, with the growth rate expanding by 0.9 percentage points compared to the full previous year. On a monthly basis, due to factors such as the timing of the Spring Festival, CPI rose slightly by 0.2% year-on-year in January. In February, an extended holiday period spurred concentrated release of consumer demand, driving the CPI growth rate up to 1.3%, the highest level in nearly three years. In March, seasonal moderation in consumer demand led to a slight dip in the CPI increase to 1.0%.
Food prices shifted from decline to growth. In the first quarter, food prices rose by 0.4% year-on-year, reversing a 1.5% decline seen over the full previous year, contributing approximately 0.08 percentage points to the CPI increase. Within the food category, prices of fresh vegetables and fresh fruit rose by 7.6% and 4.3%, respectively, while beef, mutton, and aquatic product prices increased by 8.2%, 5.9%, and 3.5%. These five items collectively contributed about 0.35 percentage points to the CPI rise. In contrast, pork and egg prices fell by 11.3% and 5.8%, respectively, jointly pulling down the CPI by approximately 0.26 percentage points. Prices of other food items remained largely stable.
The decline in energy prices continued to narrow. Energy prices dropped by 2.5% year-on-year in the first quarter, with the rate of decline narrowing by 0.8 percentage points compared to the full previous year, dragging the CPI down by about 0.17 percentage points. Influenced by factors including international geopolitical conflicts, global oil prices fluctuated upward. Domestic gasoline prices shifted from a decline to an increase year-on-year in March. On average, gasoline prices fell by 5.9% in the first quarter, with the decline narrowing by 1.3 percentage points from the full previous year, reducing the CPI by approximately 0.18 percentage points.
Core CPI growth expanded. Excluding food and energy prices, core CPI rose by 1.2% year-on-year in the first quarter, with the growth rate expanding by 0.5 percentage points compared to the full previous year. Service prices saw a moderate rebound, increasing by an average of 0.8% in the first quarter, up 0.3 percentage points from the full previous year, contributing about 0.39 percentage points to the CPI rise. Within this category, medical service and education service prices rose by 2.8% and 0.5%, respectively, jointly contributing approximately 0.22 percentage points to the CPI increase. During the holiday period, robust demand for travel, entertainment, and dining out pushed up prices for air tickets, travel agency fees, hotel accommodation, catering services, and cultural entertainment services by 4.5%, 2.5%, 1.3%, 1.3%, and 0.8%, respectively, collectively adding about 0.17 percentage points to the CPI.
Prices of industrial consumer goods, excluding energy, saw an expanded increase, rising by an average of 2.5% in the first quarter, up 1.4 percentage points from the full previous year, contributing approximately 0.60 percentage points to the CPI rise. Driven by rising international gold prices, domestic gold jewelry prices surged by 73.1%, contributing about 0.27 percentage points to the CPI increase. Continued effectiveness of consumption promotion policies led to price increases for recreational durable goods, household appliances, clothing, and communication devices by 4.9%, 4.7%, 1.9%, and 1.9%, respectively, with growth rates expanding compared to the full previous year. These items jointly contributed about 0.19 percentage points to the CPI rise.
II. Gradual Rebound in Production Sector Prices The Producer Price Index (PPI) fell by 0.6% year-on-year in the first quarter, with the rate of decline narrowing by 2.0 percentage points compared to the full previous year. On a monthly basis, influenced by the transmission of international commodity prices, the continued effectiveness of domestic macroeconomic policies, and rapid growth in computing power demand, PPI increased by 0.4% month-on-month in both January and February, while the year-on-year decline continued to narrow, reaching 1.4% and 0.9%, respectively. In March, deepened impacts from international factors led to a 1.0% month-on-month rise in PPI, with the year-on-year figure turning positive at 0.5%.
Improved domestic supply-demand dynamics drove price rebounds in some industries. Continued efforts in capacity management and comprehensive rectification of internal competition have shown results, leading to stabilized and recovering prices in certain sectors. In the first quarter, prices for photovoltaic equipment and component manufacturing, as well as lithium-ion battery manufacturing, rose by 3.0% and 0.5% year-on-year, respectively, reversing declines seen over the full previous year. Prices for coal processing, and coal mining and washing, fell by 6.8% and 6.4%, respectively, with declines narrowing by 15.2 and 9.3 percentage points compared to the full previous year. Prices for ferrous metal smelting and rolling increased month-on-month for three consecutive months, rising by 0.3% in March.
The vigorous development of "AI+" and rapid growth in computing power demand drove price increases for optical fiber manufacturing, which rose by 32.4% year-on-year, electronic specialty materials manufacturing, up 14.3%, and service consumer robot manufacturing, up 0.6%, all reversing declines from the full previous year. Prices for external storage devices and components, and control micro-motors, increased by 20.3% and 1.1%, respectively, with growth rates expanding by 19.6 and 1.0 percentage points compared to the full previous year.
Continued progress in green transformation led to price increases for biomass fuel processing and environmental protection equipment manufacturing, which rose by 2.3% and 0.5%, respectively, reversing declines from the full previous year.
International factors contributed to price increases or narrowed declines in related domestic industries. Since the beginning of the year, fluctuating increases in international crude oil prices, particularly a rapid rise since March, led to a shift from decline to growth in domestic oil extraction prices on a monthly year-on-year basis. On average, oil extraction prices fell by 10.6% in the first quarter, with the decline narrowing by 3.0 percentage points compared to the full previous year. Prices for organic chemical raw material manufacturing dropped by 7.0%, with the decline narrowing by 1.4 percentage points.
High international non-ferrous metal prices drove year-on-year increases in domestic non-ferrous metal mining and processing, and non-ferrous metal smelting and rolling, which rose by an average of 29.8% and 20.5%, respectively, in the first quarter, with growth rates expanding by 12.6 and 14.2 percentage points compared to the full previous year. Within the non-ferrous metal sector, gold smelting and copper smelting prices surged by 55.7% and 28.6% year-on-year, respectively.
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