China’s consumer inflation accelerated to its fastest in five months in January while producer price deflation persisted, as holiday consumer spending was mixed.
Deflationary pressures are likely to persist in China this year, analysts say, unless policymakers can rekindle sluggish domestic demand, with tariffs by US President Donald Trump on Chinese goods adding to pressure on policymakers trying to spur growth in the world’s second-largest economy.
The consumer price index rose 0.5 per cent last month from a year earlier, quickening from December’s 0.1pc gain, data from the National Bureau of Statistics showed on Sunday, above the 0.4pc rise estimate in a Reuters poll of economists.
Core inflation, excluding volatile prices for food and fuel, rose to 0.6pc from 0.4pc in December.
The numbers were skewed by seasonal factors, as the Lunar New Year, China’s biggest annual holiday, began in January this year versus February last year. Typically, prices rise as consumers stockpile goods, particularly food for big family gatherings.
Prices of airplane tickets rose 8.9pc from a year earlier, tourism inflation was 7.0pc and movie and performance ticket prices rose 11.0pc.
Consumer spending reports over the holidays were mixed, reflecting worries over wage and job security.
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