BEIJING: China’s consumer inflation rose 1.0% in March from a year earlier, official data showed on Friday, easing from February’s 1.3% increase as spending cooled after the Lunar New Year holiday period. On a month-on-month basis, the consumer price index fell 0.7%, reversing February’s 1.0% rise. For the first quarter, consumer prices were up 0.9% from a year earlier, according to the National Bureau of Statistics, keeping inflation positive but still modest across the broader economy.
The March data showed price gains remained uneven across categories. Urban consumer prices rose 1.1% from a year earlier and rural prices increased 0.9%. Food prices were up 0.3%, while non-food prices rose 1.2%. Consumer goods prices increased 1.3% and services prices advanced 0.8%. From February, food prices fell 2.7%, non-food prices slipped 0.2%, consumer goods prices declined 0.3% and services prices dropped 1.1%, reflecting softer post-holiday demand in travel and other service areas.
Core inflation, which strips out food and energy prices, rose 1.1% in March, down from 1.8% in February. The statistics bureau said the month-on-month decline in headline prices was driven by a seasonal pullback in consumption after the holiday period. Service price gains slowed for categories such as travel agencies, hotel accommodation, air tickets and vehicle rentals. Food inflation also moderated, with slower increases in fresh vegetables, beef, lamb and fruit, while pork and egg prices fell further from a year earlier.
Consumer Prices Ease After Holiday
China’s factory-gate prices, however, turned positive for the first time in 41 months. The producer price index rose 0.5% in March from a year earlier, compared with a 0.9% decline in February. On a monthly basis, producer prices climbed 1.0%, marking a sixth straight monthly increase and the strongest month-on-month gain in four years. The statistics bureau said the rise reflected higher international commodity prices and improving supply-demand conditions in parts of domestic industry.
Producer price gains were led by raw materials and selected manufacturing sectors. Prices in nonferrous metal mining rose 36.4% from a year earlier, while nonferrous metal smelting and rolling gained 22.4%. Oil and gas extraction prices rose 5.2%, swinging from a 12.9% decline in February. The bureau also reported price increases in solar equipment and components, lithium-ion batteries, optical fiber manufacturing, data storage equipment and materials used in electronics, alongside gains linked to energy use, steel demand and parts of the green economy.
Factory-Gate Prices Return To Growth
The March figures marked a shift from February, when consumer inflation reached its highest level in more than three years as holiday travel and spending pushed up services and discretionary purchases. In January, consumer inflation had stood at 0.2%, meaning the first quarter opened softly before accelerating in February and then easing again in March. The latest data indicated that the holiday lift to consumer prices did not carry into the final month of the quarter, even though underlying inflation remained above zero.
For policymakers and markets, the March report offered a split picture of price conditions in the world’s second-largest economy: consumer inflation stayed mild, while factory prices moved out of a prolonged deflation stretch. The bureau said imported cost pressures, especially in energy and metals, combined with firmer conditions in some domestic industries to lift producer prices, while household demand normalized after the holiday period. The March figures left China with positive consumer inflation and a return to producer price growth heading into the second quarter – By Content Syndication Services.
