(Yicai) Feb. 11 -- China’s consumer inflation fell short of what was predicted for January, pushed lower by last year’s Lunar New Year timing and falling energy prices, while factory gate prices fell by the least in a year and a half, supported by government measures to rein in extreme competition and excess capacity in certain industries alongside rising demand in some sectors.

The consumer price index eased to 0.2 percent from a year earlier, slowing from December’s 0.8 percent increase, according to data published by the National Bureau of Statistics today. That is the weakest uptick since last October and falls short of the 0.4 percent increase predicted by an Yicai poll of chief economists. The CPI rose 0.2 percent from December.

The Lunar New Year was in January last year, when food and some service prices rose markedly, creating a high base of comparison that weighed on last month’s CPI growth, said Dong Lijuan, chief statistician of the NBS’ urban division. 

In addition, energy prices fell 5 percent in January, dragging down year-on-year CPI growth by about 0.34 percentage point, 0.06 point more than in the previous month. Gasoline prices dropped 11.4 percent, with the decline widening by 3 points from December, she said.

The core CPI, which excludes food and energy prices, rose 0.8 percent from a year earlier and 0.3 percent from the previous month, the most in six months, Dong added.

The producer price index fell 1.4 percent from a year ago, improving from December’s 1.9 percent drop, the NBS data showed. That is the smallest decline since July 2024 and was what chief economists forecast. The PPI rose 0.4 percent from December, marking the fourth consecutive monthly increase and a 0.2 point acceleration from December.

The month-on-month rise in the PPI was driven by several factors, Dong said. First, the ongoing construction of a unified national market continued to lift prices in some industries. Second, rising demand pushed up prices in related sectors. And third, input factors caused a price trend divergence among the domestic nonferrous metals and petroleum-related industries, she said.

Favorable factors supporting a moderate price recovery are building, NBS spokesperson Fu Linghui told a State Council press briefing.

From the perspective of fundamentals, as special actions to boost consumption are effectively implemented, especially with the introduction of a series of additional measures such as the coordinated fiscal and financial policies to stimulate domestic demand, consumer demand is expected to gradually expand, providing a foundation for price stability, Fu said. 

From the standpoint of policy support, the effects of industry self-discipline and capacity regulation will continue, and capacity regulation in key industries will be further strengthened this year, and the product standard system and quality will be improved, Fu said. That is also conducive to a pickup in prices, he added.

Editor: Emmi Laine