China's consumer price index (CPI) rose to a three-year high in February, lifted by holiday-driven demand for services and food as well as higher industrial goods prices, a spokesman for the National Bureau of Statistics (NBS) said on Monday.
China's consumer price index, a main gauge of inflation, rose 1.3 percent year on year last month, and the core CPI, which excludes food and energy prices, wen up 1.8 percent year on year, according to the NBS data.
Fu Linghui, NBS spokesman and chief economist, attributed the surge primarily to the extended nine-day Spring Festival holiday, which spurred travel and consumption.
"Service prices have risen significantly. Due to this year's extended Chinese New Year holiday, residents traveled more for family visits and leisure. A notable feature of this year's holiday was that many people first returned to their hometowns and then went on for sight-seeing, which drove higher prices of services such as transportation, accommodation and dining," said Fu at a press briefing in Beijing on China's national economic performance in the first two months of this year.
"In February, service prices increased 1.6 percent year on year, a much larger rise than that in January and contributing about 0.75 percentage points to the CPI for the month. This was the single biggest factor behind the CPI increase," Fu continued.
Food prices also rebounded as family gatherings and festive consumption boosted demand, adding to the CPI rise, said the official.
"Food prices shifted from decline to growth. During the Chinese New Year holiday, residents engaged more in family visits and gatherings, which boosted food spending and drove up related product prices. Together, services and food contributed about 1 percentage point to the CPI increase in February," Fu said.
Prices of industrial consumer goods saw broader gains, rising 1.1 percent from a year earlier and up 0.2 percentage points from January. This also contributed to the CPI rise, said Fu.
Fu noted that February's CPI was significantly influenced by the nine-day Chinese New Year holiday. He suggested combining January and February data to mitigate seasonal distortions and provide a more accurate assessment of underlying trends.
"In the January-February period, CPI rose 0.8 percent year on year, the same as December's pace but higher than the fourth quarter and the full year of 2024, pointing to a mild recovery. Looking more closely, the core CPI, which excludes food and energy, increased 1.3 percent year on year in the first two months, 0.1 percentage points higher than the December level and slightly above the fourth-quarter level, also indicating a moderate rebound," said Fu.
A moderate rebound in consumer prices supports business operations, employment and income growth, and strengthens economic circulation, he said.
Noting that global energy price volatility may add imported inflationary pressure, Fu said that China's domestic supply capacity remains strong.
Fu stated that with more proactive policies to boost demand, enhance supply, increase household incomes, and develop new consumption channels, conditions will be favorable for further stabilizing and improving prices, said Fu.
China's February CPI rises on holiday demand
