China’s year-on-year CPI growth in January has fallen to a half year low, while PPI has dropped to its lowest point in over a year.
The latest data from China’s National Bureau of Statistics indicates that China posted CPI growth of 1.5% in January, for a deceleration of 0.3 percentage points compared to December, and its weakest growth level in half a year.
January PPI slowed 0.6 percentage points from December to 4.3%, for the third consecutive month of deceleration.
Chinese analysts expect CPI to bounce back to over 2% in February with the start of the Lunar New Year, and CPI to remain at around 2% for the full year.
PPI growth will continue to ease yet remain positive, with policymakers hoping that constrained inflation in 2018 will provide propitious conditions for Xi Jiping’s much vaunted transition to “quality” from quantity economic growth, as well as breathing space for macroeconomic policy.