Is China Emerging From Deflation? Prices Rise for a Fourth Straight Month

Korea Economic Daily

Summary

China’s consumer price index (CPI) has risen for four consecutive months, adding to signs that deflationary pressure may be easing.
January CPI rose 0.2% year on year, missing the 0.4% Reuters and Bloomberg forecast, but extending the uptrend since October last year.
China’s National Bureau of Statistics said consumer demand is recovering, with core CPI up 0.3% month on month to the highest level in six months.

Forecast Trend Report by Period

China’s consumer price index (CPI) rose for a fourth consecutive month. The run has fueled expectations that deflationary pressure—falling prices amid a slowing economy—that had weighed on China may be starting to ease.

According to the National Bureau of Statistics of China on the 11th, China’s CPI last month increased 0.2% from a year earlier. It came in slightly below the 0.4% forecast by Reuters and Bloomberg, but has been on an upward track since October last year.

In January, food prices fell 0.7% from a year earlier, but non-food prices rose 0.4%, driving the overall CPI increase. Over the same period, goods prices climbed 0.3% and services prices advanced 0.1%. As the property-market crisis, worsening labor conditions, and weak domestic demand converged, China’s annual CPI inflation rate last year (0%) fell to the lowest level in 16 years since 2009.

The NBS said, “Prices remain at a low level, but consumer demand is recovering,” adding that core CPI excluding food and energy rose 0.3% month on month to the highest level in six months.

Beijing—Correspondent Kim Eun-jung kej@hankyung.com