China's Consumer Price Index (CPI), a key measure of inflation, recorded its fastest year-on-year increase in five months in January, largely driven by a surge in spending during the Spring Festival period, according to an analyst at the National Development and Reform Commission (NDRC).
China's CPI was up 0.5 percent year on year in January, the data from the National Bureau of Statistics (NBS) showed on Sunday.
During the Spring Festival season, the rise in food prices, combined with the rebound in gasoline prices, contributed to the year-on-year growth of the CPI.
"The CPI (in January) continued to rise at a moderate pace year on year, with the rate of increase higher than the previous month. Among the eight main categories of goods and services in the CPI, prices for household goods and services, as well as transportation and telecommunications, saw slight declines compared to the previous year. However, prices in the other six categories increased year on year," said Zhang Xuewu, head of the price analysis and forecasting division at the NDR's Price Monitoring Center.
In addition, on a monthly basis, the CPI increased by 0.7 percent in January, according to data from the NBS.
During the Spring Festival season, the prices of services and food increased significantly, which was the main factor causing the January CPI to rise month on month. The increase in service prices was mainly driven by higher demand for family visits, gatherings, and travel during the holiday, which led to price rises in things like air tickets, movies, tourism, hotel stays, and various living services. Besides, the prices of food items such as fresh vegetables, fruits, and aquatic products went up, along with rising prices of gold and gasoline, contributing to the increase in the CPI for the month.
"In January, China's CPI rose month on month due to seasonal factors, with prices for food, energy, and services increasing. The rise in food prices was mainly caused by higher demand during the Spring Festival," said Zhang.
Due to the off-season in industrial production during the Spring Festival and other factors, China's Producer Price Index (PPI), which measures the cost of goods at the factory gate, fell by 2.3 percent year on year in January and decreased by 0.2 percent month on month, the NBS data showed.
Spring Festival spending drives China's CPI rise in January: analyst
