China consumer rates fall found in January on drop found in services costs
10 February, 2021
China's consumer rates fell in January after a short improvement towards the end of last year, due to the world's second-biggest overall economy was reach by the impression of fresh coronavirus outbreaks and reduced travel, official data demonstrated on Wednesday (Feb 10).
The buyer price index (CPI), a key gauge of retail inflation, fell 0.3 % from this past year, with the National Bureau of Figures stating that residents travelled fewer given a number of lockdowns in northern China and more restrictions.
Consumers also didn't spend as much on services compared with this past year - when the impact of COVID-19 had not yet been felt.
"With the Spring Festival (Chinese New Year) taking place in February this year, and the affect of a partial epidemic propagate, there were decreases in both citizens' travel and some contact-based services," stated NBS senior statistician Dong Lijuan.
Dong added that air flow ticket prices fell 33.2 % on-year, while travel company service fees dropped 9.9 %.
The entire CPI drop was below analysts' expectations of prices being unchanged, according to a Bloomberg poll, and straight down from December's 0.2 per cent on-year rise.
But NBS figures display that food rates rose on-month due to approaching festivities, native COVID-19 outbreaks and low temperatures that reach production and transportation.
"Consumer price inflation is likely to spike in February as the New Year effect reverses," said analysts at Capital Economics, adding the put on deflation is "no reason for concern".
Pork rates, however, were lower than last year, continuing a downward tendency after costs of the staple meat in China rocketed because of an African swine fever outbreak.
There was also further improvement in factory-gate prices, NBS data showed, with the producer price index (PPI) increasing on-year for the first time since January 2020, consistent with analysts' expectations.
Dong noted domestic demand ongoing to boost, and so did the costs of commodities such as crude oil and iron ore, driving a monthly increase.
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