In February, China’s CPI marked its first annual increase after a six-month sequence of declines. CPI rose by 0.7% yoy, surpassing expectation of 0.3% yoy and marking a significant rebound from January’s -0.8% yoy, the largest decrease in consumer prices since 2009. On a month-on-month basis, CPI acceleration was evident, jumping from a modest 0.3% mom to 1.0% om, well above the forecasted 0.7% mom.
This inflationary uptick, primarily driven by heightened demand during the Lunar New Year celebrations, underscores the seasonal influence on China’s economic activities. Notably, food prices witnessed a considerable increase of 3.3% mom, a reflection of the festive period’s impact.
Conversely, PPI had a contrary movement, declining by -2.7% yoy, indicating deeper deflationary pressures than the anticipated -2.5%.
