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China's Inflation Hits 1.3% in Feb, Highest in Nearly 3 Years

China's consumer inflation accelerated to 1.3% year-on-year in February, marking the highest increase in nearly three years, largely driven by Spring Festival holiday effects and recovering consumption demand. Service prices saw significant growth, with airline tickets and hotel accommodation costs jumping sharply. Meanwhile, the decline in the producer price index narrowed for a third consecutive month, reflecting rising global commodity prices and domestic industrial demand. The data indicates a mixed but stabilizing price environment in the world's second-largest economy.

Key Points: China's Consumer Inflation Rises to 1.3% in February

  • CPI rose 1.3% YoY
  • Service prices surged 1.6%
  • PPI decline narrowed to -0.9%
  • Spring Festival boosted travel & food costs
2 min read

China's consumer inflation rises over 1 pc in Feb

China's CPI inflation rose to 1.3% in February, driven by holiday demand and service price surges, while PPI decline narrowed.

"This narrowing was driven by a rise in global commodity prices, rapid demand growth in certain domestic industries... - Dong Lijuan"

New Delhi, March 10

The consumer price index of China -- a main gauge of inflation -- increased 1.3 percent YoY last month, driven by the effects of the Spring Festival holiday, official data showed.

The core CPI, which excludes food and energy prices, increased 1.8 percent year on year, according to data released by the National Bureau of Statistics (NBS).

Data also revealed that the producer price index (PPI), which measures costs for goods at the factory gate, went down 0.9 percent year on year last month, with the decline narrowing continuously, the NBS noted, reports Xinhua news agency.

This narrowing was driven by a rise in global commodity prices, rapid demand growth in certain domestic industries, and the continued effectiveness of macroeconomic policies, NBS statistician Dong Lijuan explained.

Compared with the same period last year, affected by the shift of the Spring Festival and the recovery of consumption demand, the rise of CPI in February expanded to 1.3 percent from the 0.2-percent gain recorded in the previous month, marking the highest increase in nearly three years, Dong pointed out.

A closer look shows that service prices rose by 1.6 percent in February, with the growth rate expanding by 1.5 percentage points from the previous month, contributing approximately 0.75 percentage points to the year-on-year CPI increase.

In the service sector, prices of airline tickets, transportation rentals, travel agency fees and hotel accommodation respectively increased by 29.1 percent, 19.8 percent, 12.5 percent and 5.4 percent in February.

Prices of pet services, vehicle repair and maintenance, household services and food deliveries rose by 13 percent, 12 percent, 6.3 percent and 5.6 percent, respectively, last month.

Prices of fresh vegetables, beef, mutton and fresh fruits increased by 5.9 percent to 10.9 percent in February, with the increase wider than that seen in the previous month. Together, these food price increases contributed roughly 0.41 percentage points to the year-on-year rise in the CPI.

On a month-on-month basis, CPI went up 1 percent in February from the 0.2-percent gain in the previous month, the highest in nearly two years, the data revealed.

Industrial consumer goods prices rose by 0.4 percent, an increase of 0.1 percentage points compared with the previous month.

Compared with the same period last year, China's PPI declined by 0.9 percent, with the rate of decrease narrowing by 0.5 percentage points from the previous month, marking three consecutive months of reduced decline.

- IANS

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Reader Comments

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Priyanka N
The surge in service prices, especially travel and hotels, is huge! 29% for airline tickets? 😳 This shows a big post-pandemic consumption rebound during their holiday. We see similar trends during Diwali and wedding season here, but hopefully not at these rates. Our travel prices need to stay competitive.
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Aman W
The core CPI at 1.8% is the key number. It suggests underlying price pressures are still modest. The PPI decline narrowing is a positive sign for their manufacturing sector. As a business owner importing components, I hope this leads to more stability in supply chains and prices for us.
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Sarah B
The detailed breakdown is useful. Food prices (veggies, fruits, meat) contributing 0.41 points is something every Indian household can relate to. Inflation hits the kitchen first. It's a reminder for our policymakers to ensure stable food supply and prices, which is always a top concern.
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Karthik V
Respectfully, while the data is presented, we must be cautious. Chinese economic data has faced credibility questions in the past. The narrative of "recovery" and "effective policies" comes directly from their statistics bureau. Independent verification is difficult. We should analyze such reports with that context in mind.
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Nisha Z
Pet services up 13% and food delivery up 5.6%! This shows a shift in lifestyle and spending patterns in urban China, similar to trends in our metros. The demand for convenience and pet care is becoming a significant economic driver. Our startups in these sectors should take note.

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