China factory gate prices fall in January, CPI rises

CHINA’S January factory gate prices fell more than economists expected, suggesting that flashes of domestic demand that had stoked consumer prices after the zero-Covid policy ended are not yet strong enough to rekindle upstream sectors.

The producer price index (PPI) was down 0.8 per cent on a year earlier, extending the 0.7 per cent drop the prior month and faster than the 0.5 per cent fall tipped in a Reuters poll.

The consumer price index (CPI) last month was 2.1 per cent higher than a year earlier, up on the 1.8 per cent annual gain seen in December, data from the National Bureau of Statistics (NBS) showed on Friday (Feb 10), but just shy of the 2.2 per cent increase economists had predicted in a Reuters poll.

Economists expect the cost of living in China will pick up over the coming months, with inflation approaching the target of about 3 per cent that the government set last year. REUTERS