China's consumer prices see mild uptick, factory inflation continues to ease

People shop at a grocery market in Nanning, south China's Guangxi Zhuang Autonomous Region, Nov. 9, 2022. (Xinhua/Lu Boan)

BEIJING, Feb. 10 (Xinhua) -- China's consumer inflation saw a mild uptick last month, driven by higher consumption demand during the Spring Festival holiday, while factory-gate prices continued to moderate, official data showed Friday.

The country's consumer price index (CPI), a main gauge of inflation, rose 2.1 percent year on year in January and edged up 0.8 percent from the previous month, the National Bureau of Statistics (NBS) said.

The CPI uptick in January can be partly attributed to the Spring Festival holiday boom and the optimized epidemic response, according to Dong Lijuan, a senior statistician with the NBS.

On a monthly basis, food prices rose 2.8 percent in January. The growth expanded by 2.3 percentage points month on month, and raised monthly consumer inflation by about 0.52 percentage points, according to the data.

Specifically, the price of pork, a staple meat in China, slumped 10.8 percent in January from the previous month, as the supply of pork continued to increase, Dong said.

However, pork prices still rose 11.8 percent year on year, narrowing by 10.4 percentage points from the previous month.

Non-food prices rose 1.2 percent year on year in January. The price of gasoline, diesel, and liquified petroleum gas went up by 5.5 percent, 5.9 percent, and 4.9 percent year on year, respectively.

On a monthly basis, the surge in demand for travel and entertainment after the adjustment of the country's COVID-19 response buoyed the prices of plane tickets, movie and show tickets, and tours by 20.3 percent, 10.7 percent and 9.3 percent, respectively, according to Dong.

Although the impacts of seasonal factors are waning and pork prices remain at a low level, consumer inflation in the first quarter will sustain its mild growth due to more vigorous economic activities and a low-base effect, according to Zhou Maohua, an analyst with the China Everbright Bank.

Friday's data also showed that China's producer price index, which measures costs for goods at the factory gate, slid 0.8 percent year on year in January.

The decrease expanded by 0.1 percent from that registered in December. On a monthly basis, China's PPI edged down 0.4 percent in January.

"Prices of industrial products continued to fall in January, weighed down by fluctuating international crude oil prices and sliding domestic coal prices," Dong said.

The PPI in the first quarter is likely to continue shrinking compared to last year, according to Zhou.

Looking at 2023, Bruce Pang, the Greater China chief economist of real estate and investment management services firm JLL, anticipated that China's inflation growth and overall price situations would remain tame and controllable. Pang expected that the average inflation level for the whole year would stay below policy targets.