China's consumer price growth slows in January

Inflation eases sharply from December

The Consumer Price Index (CPI), a primary gauge of inflation, rose by 0.2% year-on-year in January, data from the National Bureau of Statistics showed. This marks a notable slowdown from December’s 0.8% increase, which had been the fastest pace in nearly three years.

Economists surveyed by Bloomberg had projected a 0.4% rise, meaning the actual figure undershot forecasts.

Domestic demand still weak despite stimulus measures

China’s economic momentum has remained subdued in recent years, even as exports experienced a historic surge. Policymakers have rolled out several initiatives to encourage household spending — including subsidy programmes for consumer goods — but the impact so far has been limited.

Lunar New Year timing affects comparisons

Analysts cautioned that year-on-year comparisons for January are complicated by the shifting dates of the Lunar New Year holiday. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, noted that the holiday timing can distort seasonal price patterns.

Factory-Gate prices continue to decline — But more slowly

Separate data showed that producer prices — which measure prices at the factory gate — remained in deflation but improved slightly.

The Producer Price Index (PPI) fell 1.4% year-on-year in January, marking the slowest rate of decline since July 2024. The drop was also marginally better than the 1.5% decrease expected by analysts.

On a monthly basis, PPI rose 0.4%, suggesting that deflationary pressures in the manufacturing sector may be starting to ease.