MNI BRIEF: China's Jan CPI Rises, PPI Continues to  Decline

China's Consumer Price Index rose 2.1%y/y in January, which was in line with market expectations but up from December’s 1.8% y/y as food prices increased due to Chinese New Year and consumption recovered after the lifting of Covid controls, data from the National Bureau of Statistics released on Friday showed.

Food costs rose 6.2% y/y, up 1.4 percentage points from the previous month and contributing 1.13 pps to the higher CPI. Pork prices, the main CPI driver, rose by 11.8% y/y, down 10.4 pps from December. Fuel costs were up 3%y/y, compared with 5.2% y/y in December, the NBS said. Service prices rose 1%y/y, up 0.4 pps from December.

Core CPI, which excludes food and energy prices, rose 1% y/y, up 0.3 pps from last month. On a monthly basis, CPI rose 0.8%.

The producer price index fell 0.8% y/y due to lower oil and coal prices, compared to a 0.7% decline in December. The print was worse than the forecast 0.5% y/y fall. On a monthly basis, PPI fell 0.4%, compared with the previous 0.5% decline.