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MNI DATA IMPACT: China Feb CPI Higher Food Prices Limit Gains

     BEIJING (MNI) - China's inflation eased slightly to 5.2% y/y in February,
decelerating from the eight-year high of 5.4% in January and meeting market
expectations.  
     Food prices were the main driver, pushed higher by increasing logistics
costs due to transportation lockdowns and food stockpiling as the coronavirus
outbreak kept consumers at home.
     Meanwhile, factory-gate inflation returned to negative growth on weakened
demand as the epidemic disrupted production in factories.
     Here are key takeaways from data released by the National Bureau of
Statistics on Tuesday:
     - The slowdown in CPI was limited by higher food prices, which spiked by
21.9% y/y compared to 20.6% in January, accounting for 4.45 percentage points of
the CPI gain. In the food category, pork prices accelerated to 135.2% y/y from
January's 116.0%, driving up the CPI by 3.19 pps.
     - Some non-food prices fell on shrinking supply and demand. Gasoline and
diesel prices decreased 5.7% and 6.2% from the previous month, while airline
tickets, hair dressing and accommodation prices declined 7.8%, 2.5 and 1.0% m/m,
respectively.
     - The core CPI, excluding food and energy prices, decelerated 0.5 pp to
1.0% y/y from January.
     - The CPI gained 0.8% monthly, down from 1.4% in the previous month. 
     - The PPI fell 0.4% y/y, reversing the 0.1% rebound in the previous month
due to declining prices in oil-related industries as international crude oil
prices fell sharply in February. The figure was in line with the forecast of
-0.3%.
     - The PPI also contracted 0.5% in Feb-Jan from Jan-Dec.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com
--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com
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