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China's Consumer & Producer Price Inflation Eases

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China's consumer and producer price inflation slowed in January, data from the National Bureau of Statistics showed Friday.

Consumer prices climbed 1.5 percent year-on-year in January, the weakest in four months, after rising 1.8 percent in December. The rate came in line with expectations.

Food prices fell 0.5 percent on year versus 0.4 percent drop a month ago. Meanwhile, non-food prices rose 2 percent following December's 2.4 percent rise.

Meanwhile, monthly inflation doubled to 0.6 percent from 0.3 percent in December.

Julian Evans-Pritchard, an economist at Capital Economics, said consumer price inflation is set to rebound this month, thanks to a seasonal spike in food prices. However, this will be short-lived and is unlikely to trigger policy tightening.

On contrary, declines in non-food inflation and producer price inflation will open the door to monetary policy easing this year, the economist added.

The statistical office also said that producer prices grew 4.3 percent on year, weaker than December's 4.9 percent increase but exceeded expectations of 4.2 percent.

Producer price inflation has slowed for the third consecutive month in January and was the weakest in 14 months.

On a monthly basis, producer prices gained only 0.3 percent following December's 0.8 percent increase.

by RTT Staff Writer

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