US EditionChina consumer inflation hits three-year high as producer deflation eases
Consumer inflation rose 1.3% year-on-year in February, driven by holiday spending, while factory-gate deflation eased to a 0.9% decline, China's National Bureau of Statistics reported.
- On Monday, China's National Bureau of Statistics reported the consumer price index rose 1.3% year-on-year and 1% month-on-month in February, beating economists' forecasts.
- Ahead of the Lunar New Year, authorities urged spending, and Beijing maintained its inflation goal at "around 2%" while setting a 4.5-5% GDP growth target for 2026.
- Meanwhile, factory-gate prices showed a slower pace of deflation as the producer-price index fell 0.9% last month, while rising oil costs linked to Middle East tensions ahead of February 28 pushed consumer prices higher.
- To bolster domestic demand, Chinese officials allocated 250 billion yuan to a consumer trade-in program and a 100 billion yuan government fund, while Larry Hu said stimulus will remain gradual this year.
- Analysts warned the pick-up may not last as inflation could unwind once geopolitical tensions in the Middle East ease; Zichun Huang, Capital Economics, wrote `Tensions in the Middle East will push inflation higher for as long as global energy prices remain elevated`.
21 Articles
21 Articles
China inflation rate highest in three years
China reported its highest inflation rate in three years, a welcome sign for a country grappling with deflation and moribund consumption. The increases were driven by surging spending during the Lunar New Year holiday. But economists noted the war in the Middle East and Chinese authorities’ campaign against “involution” — price wars that damage market competition — were likely to further fuel inflationary pressures, helping ward off a “deflation…
The consumer price index has increased by 1.3% compared to the previous year, this is the largest increase since January 2023. This is the month in which the New Year's holidays took place this year.
Chinese authorities have called for increased domestic spending in the country, especially during the recent Lunar New Year holiday, when there are often increases in travel and shopping.
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