Advertisement
China deflation
EconomyEconomic Indicators

China faces uphill battle to boost demand despite consumer price recovery in January

China’s consumer prices received a boost amid household spending rise in festival season, but ex-factory price fall extended

Reading Time:2 minutes
Why you can trust SCMP
3
China’s domestic demand has been a perennial concern as price indices have remained stagnant for months. Photo: Xinhua
Sylvia Ma
China’s consumer prices picked up in January given the seasonal spending boost from Lunar New Year holiday, but analysts warned that the country still needed to battle deflationary pressure and revitalise domestic demand in 2025 as policy shifts from US President Donald Trump have made the external environment more inscrutable.

The consumer price index (CPI), a major indicator of inflation, rose by 0.5 per cent year on year last month, the National Bureau of Statistics (NBS) said on Sunday, following a 0.1 per cent increase in December. The figure is in line with the average estimate in a poll of economists by financial data provider Wind.

The index was up 0.7 per cent from December, the highest month-on-month rise in more than three years.

Meanwhile, the producer price index (PPI), which tracks prices at the factory gate, fell by 2.3 per cent in January, marking the 28th consecutive monthly decline. The Wind poll had predicted a year-on-year fall of 2.07 per cent last month.

Near-zero growth in China’s CPI, observed since April 2023, has fuelled anxieties about deflation and weak demand.

The price of consumer goods rose by 0.1 per cent year on year last month, while the price of services increased by 1.1 per cent.

Food prices increased by 0.4 per cent year on year in January, while non-food prices climbed by 0.5 per cent.

Advertisement