Beijing: Consumer hypertrophy in China accelerated to five months faster in January, while producers’ prices continued, reflecting mixed consumer spending and weak factory activity.
Analysts say that the shrinkage pressure in China will continue this year, unless policymakers are able to revive the slow domestic demand, with a tariff by US President Donald Trump on Chinese goods that add pressure on Beijing to stimulate growth in the second largest economy in the world.
The consumer price index increased by 0.5 % last month than the previous year, which faster than a profit of 0.1 % in December, the data of the National Bureau of Statistics showed on Sunday, higher than an increase of 0.4 % in A. Reuters Economists poll.
Basic inflation, except for the volatile prices of food and fuel, set out to 0.6 % in January from 0.4 % in the previous month.
Shu Tianchen, senior economists in the Economic Intelligence Unit, said that although it is expected that consumer prices are expected to rise gradually, the prices of producers are unlikely to return to positive lands in the short term with the continued excessive capacity in industrial goods.
“If it is measured by the gross domestic product laboratories, it will take a few quarters to get out of the shrinkage,” Shu said.
The numbers were perverted by seasonal factors, as the new lunar year began the largest annual holiday in China, in January this year, against February last year. Prices usually rise with consumer storage, especially nutrients for large family gatherings.
Aircraft tickets prices increased by 8.9 % from the previous year, tourism inflation was 7.0 %, and film and performance tickets prices increased by 11.0 %.
Consumer spending reports were mixed during holidays, reflecting fears about wages and job security.
While the Chinese flocked to the cinemas and spent more shopping, catering and local travel, the individual spending during the holidays grew by only 1.2 % over the previous year, compared to a 9.4 % increase in 2024, estimated analysts in Anz.
The consumer price index increased by 0.7 % in January of the previous month, less than 0.8 % lower and compared to a result that has not changed in December.
For 2024, the consumer price index increased by 0.2 %, in line with the pace of the previous year and much less than the official goal of about 3 % for the past year, indicating that inflation was lost annual goals for the thirteenth year in a row.
Bruce Bang, Assistant Professor at the College of Business Administration at CUHK, said that China’s provinces announced the goals of economic growth 2025 with an average target prices less than 3 %, indicating that policy makers expect changes and pressure at the price level.
China’s manufacture was not expected in January, while service activity was weakened, while maintaining more motivation calls.
Beijing is widely expected to keep the economic growth expectations of about 5 % this year, but the fresh American definitions will pressure exports, which is one of the few luminous points in the economy last year.
The product price index decreased by 2.3 % on an annual basis in January, as the decrease in December and deeper from a 2.1 % decrease.
The factory gate prices remained a 38 -month deviation.
Zeoy Zhang, president and chief economist at Pinpoint Asset Management, said that the government is not expected to change monetary or financial policy before the annual parliament session in March.
“For policymakers, it seems that external uncertainty is higher than local economic challenges at this stage,” Zhang added.
