The consumer price index (CPI), which is the main indicator of inflation, Chineseincreased by 2.1% year-on-year Factors that increased consumption in January, mainly food, due to the Lunar New Year celebrations and the end of the national ‘zero covid’ policy. The producer price index (IPP), which measures industry prices, fell 0.8% for its part, according to official data released today by the Office for National Statistics (ONE).
While the CPI increased by 1.8% in December and 2% overall in 2022, the PPI fell by 0.7% year-on-year in the last month of last year, reducing its progress throughout the year to 4.1%. The development of both indicators in January fell short of analysts’ expectations, which predicted a 2.2% increase in CPI and a 0.5% contraction in PPI. In a monthly comparison, CPI rose 0.8%, surpassing all records recorded throughout 2022, and PPI fell 0.4%.
ONE statistician Dong Lijuan, in addition to the rise in food product prices, The end of ‘zero covid’ and the temporary coincidence with the country’s main annual holiday also led to increases Air ticket prices are around 20% compared to December due to the increase in demand, which has similar effects for movie tickets and other shows or touristic services.
“We expect the reopening of China to drive inflation further in the coming months, but we doubt it will rise as much as other countries when they reopen. Unlike advanced economies, Chinese households have received fewer financial transfers and experienced negative wealth effects during the pandemic,” said British consulting firm Capital Economics. “The positive ones,” said analysts Julian Evans-Pritchard and Zichun Huang.
As far as industrial prices are concerned, ONE attributed the new decline to “fluctuations” in international crude oil prices or declines in coal at the national level. IPP draws a descending line for months Due to the comparative base effect after strong inflation rates experienced in late 2021 and early 2022.
Capital Economics estimates that the institution may announce a rate cut this month.