Overview
- China’s consumer price index rose 0.2% year over year in January, below the 0.4% increase expected in a Reuters poll, and was up 0.2% on the month after a 0.8% annual gain in December.
- Producer prices fell 1.4% from a year earlier, a slightly smaller decline than the 1.5% drop expected and an improvement from December’s 1.9% fall.
- Factory-gate deflation has persisted for more than three years, reflecting ongoing pressure on manufacturers from weak domestic demand and excess capacity.
- Seasonal holiday spending and higher food prices typically bolster January inflation, yet the lift proved limited, pointing to subdued pricing power.
- China’s central bank reiterated it would maintain appropriately loose monetary policy to support the economy and guide prices toward a reasonable recovery.