China's consumer price index (CPI) edged marginally higher in January, with the increase somewhat muted by a high "base effect," due the Lunar New Year holidays falling a year earlier, in January in 2025.
China's official CPI rose 0.2% on year in January, as on-year food prices fell by 0.7%, due to heavy spending during the 2025 holiday, reported the National Bureau of Statistics (NBS) on Wednesday.
China's core CPI, that strips out certain food and energy bills, rose by 0.8% on year in January, somewhat easing from a 1.2% on-year rate logged in December.
The People's Bank of China has an inflation target on the CPI of about 3%.
China's price indices are scrutinized for signs the nation is emerging from near-deflation in the post-pandemic era, caused by industry overcapacity and shoppers made cautious by long-term declining house prices and softer job markets.
China will likely avoid deflation and post modest inflation in 2026, said ING Think, an arm of the Dutch investment house. "We hold our full year CPI inflation forecast at 0.9% on year, with the key risks to the forecast being how policy rolls out domestically, and international price developments," advised ING Think.
China's consumers enjoyed lower prices in January in transportation and communication, down 3.4%, travel and tourism services, off 6.6%, as well as housing rents, off 0.4%, according to the NBS.
In the food category, pork and egg prices fell by 13.7% and 10.6% on year in January, respectively.
In contrast, China shoppers saw beef prices rise 4.6% on year in the 12-month period ended in January.
Separately, China's producer price index (PPI) fell 1.4% on year in January, a smaller decrease than the 1.9% on-year decline logged in December, reported the NBS.
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