MNI BRIEF: China January CPI Falls To Over 14-Year Low

China's Consumer Price Index fell more than expected by 0.8% y/y in January, falling further from December's 0.3% decline to hit the lowest level since September 2009, sending a deflationary signal amid softened demand, data from the National Bureau of Statistics showed Thursday.

The drop in January CPI underperformed the market consensus of -0.6%, while the NBS attributed it to the higher comparison base as the Chinese New Year was in January last year when the relaxation of Covid-19 restrictions lifted pent-up demand. Prices of pork, vegetables and fruits fell by 17.3%, 12.7% and 9.1% y/y, which together dragged down the headline figure by about 0.78 percentage points, accounting for over 90% of the CPI decline. On a monthly basis, CPI rose 0.3%, rising from the previous 0.1% growth.

The PPI declined for the 16th straight month by 2.5% y/y, narrowing from December's 2.7% drop and outperforming the consensus of -2.6%. PPI fell 0.2% on a monthly basis, compared to the previous 0.3% decline, weighed by fluctuations in international commodity prices and the entry of traditional off-season of some industries.