(Yicai Global) Feb. 10 -- China’s core consumer price inflation, which excludes food and energy prices, dipped into negative territory for the very first time last month, in part because the country’s Lunar New Year holiday is later this year.

The main consumer price index fell 0.3 percent in January from a year earlier, but rose 1 percent from December, according to data released by the National Bureau of Statistics today.

The producer price index turned positive year on year for the first time in 18 months as China’s economic recovery gathered pace. The PPI inched up 0.3 percent from last January and 1 percent from the prior month.

The CPI reading came in slightly below expectations, while the PPI was broadly in line. Chief economists polled by Yicai Global expected a year-on-year decline in the CPI of 0.14 percent, and a 0.13 percent rise in the PPI.

The service sector has faced renewed pressure amid recent reoccurrences of the coronavirus in China, putting pressure on the core CPI. Another reason is the later Spring Festival, Zheng Houcheng, director of Shenzhen Yingda Securities' research institute, told Yicai Global. This year the lunar new year falls on Feb. 12, 19 days later than last year.

The gain in the CPI from December was partly because of the upcoming festival, but also because of the pandemic situation in some areas, low temperatures and various other factors, said Dong Lijuan, a senior statistician with the NBS.

In the long run, the CPI is still expected to remain at a lower level even though there has been a short-term rebound in pork prices due to seasonal factors and rising feed costs, according to various financial institutions.

In January, pork prices rose 5.6 percent from December, the NBS data showed.

The PPI's annual gain is partly down to rising commodity prices, especially the increased cost of crude oil in the international market. Prices have also been boosted by the sustained increase in demand in China, said Dong.

The PPI is likely to rise further in the first half of this year, Zheng predicted. The annual PPI fell steadily from February to May last year, reaching its lowest point in May, and this low base will be one reason for the PPI rise this year, he said. Also, global macro policy has been eased, resulting in relatively abundant liquidity.

Editors: Xu Wei, Tom Litting