China’s con­sumer prices climb in Jan­uary as food costs rise

The Pak Banker - - BUSINESS -

BEI­JING: China's con­sumer price in­fla­tion picked up in Jan­uary, led by food costs ahead of the week-long Lu­nar New Year hol­i­day. The con­sumer-price in­dex rose 1.8 per­cent in Jan­uary from a year ear­lier, the Na­tional Bureau of Sta­tis­tics said Thurs­day, com­pared with 1.6 per­cent a month ear­lier. The pro­ducer-price in­dex fell 5.3 per­cent, com­pared to a 5.9 per­cent de­crease in De­cem­ber, ex­tend­ing de­clines to a record 47 months. A sus­tained ac­cel­er­a­tion in con­sumer price gains may of­fer pol­icy mak­ers some re­lief as they bat­tle to un­der­pin growth while tack­ling over­ca­pac­ity. While the world's se­cond-largest econ­omy has shown some signs of eco­nomic sta­bi­liza­tion, the lin­ger­ing lack of pric­ing power -- es­pe­cially among the na­tion's fac­to­ries -- still sig­nals tepid de­mand. "The de­fla­tion pres­sures are much, much big­ger than the in­fla­tion pres­sures," said Larry Hu, head of China eco­nom­ics at Mac­quarie Se­cu­ri­ties Ltd. in Hong Kong. "The data shows that the econ­omy is pretty weak." NBS said food prices rose 4.1 per­cent from a year ear­lier, pick­ing up from 2.7 per­cent in De­cem­ber for the quick­est pace of gains since May 2014. A food price tracker by Bloomberg In­tel­li­gence rose 3 per­cent in Jan­uary from a year ear­lier, com­pared with a 2.2 per­cent gain in De­cem­ber. "The uptick in con­sumer prices is cer­tainly strik­ing," Bloomberg In­tel­li­gence econ­o­mists Tom Or­lik and Field­ing Chen wrote in a re­port. "But with vir­tu­ally the en­tirety of the in­crease com­ing from food prices, it's not an in­crease that's likely to be sus­tained for long.

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