MNI BRIEF: China February CPI Rises To 1-Year High
China's Consumer Price Index rebounded more than expected by 0.7% y/y in February, reversing the consecutive declines since October last year as prices, especially in travel services, rose amid the Chinese New Year holiday, data from the National Bureau of Statistics showed Saturday.
The rise in February CPI outperformed the market consensus of 0.3% and hit the highest level since March 2023 (0.7%), while the NBS highlighted this compared to a lower base as the Chinese New Year occurred in January last year. Pork prices, a main CPI driver, rose for the first time after nine consecutive months of decline, increasing 0.2% y/y. Service prices gained 1.9% y/y to drive up CPI by about 0.76 percentage points. Prices of tourism and air travel increased by 23.1% and 20.8%.
The PPI declined for the 17th straight month by 2.7% y/y, narrowing from January's 2.5% drop and underperforming the consensus of -2.5%. PPI fell 0.2% on a monthly basis, remaining the same as the previous decline, as industrial production was in the traditional off-season during the holiday.
Beijing has set a 3% CPI target for 2024. (See MNI: China To Target 3% CPI Rise Despite Deflation Pressure)