Consumer Prices Rise as Spring Festival Approaches
According to a recent report released by the National Bureau of Statistics, the national consumer price index (CPI) in January 2024 rose by 0.3% month-on-month. This increase marks the second consecutive month of rising consumer prices, attributed to the holiday effect. However, year-on-year, the CPI fell by 0.8%, reflecting the higher comparison base during the Spring Festival in the same period last year.
Zhang Xuewu, director of the Analysis and Forecasting Division of the Price Monitoring Center of the National Development and Reform Commission, explained that adverse weather conditions in January led to increased prices for fresh vegetables and aquatic products. Additionally, as the Spring Festival approached, the demand for pre-holiday services such as air tickets and tourism led to price increases.
Dong Lijuan, chief statistician of the Urban Department of the National Bureau of Statistics, attributed the year-on-year decline in CPI to last year’s Spring Festival occurring in January, as well as the surge in consumer demand following the pandemic.
Pang Ming, chief economist and director of the research department of Jones Lang LaSalle Greater China, sees the recent CPI increase as a sign of steady easing in consumer prices and a moderate recovery in social effective demand.
In contrast, the national Producer Price Index (PPI) fell month-on-month and year-on-year, driven by factors such as international commodity price fluctuations and the traditional production off-season for some domestic industries. However, the decline in PPI narrowed in January compared to the previous month.
Zhang Xuewu highlighted that international commodity prices and the slowdown in external demand growth have contributed to the year-on-year decline in PPI. Despite this, Pang Ming remains optimistic, predicting a moderate rebound in CPI and a clear trajectory for PPI to return to positive levels as economic momentum and market entities’ endogenous power continue to improve.
As the economy continues to recover and improve, analysts foresee fluctuations in the short term but expect a gradual return to normal inflation levels in the medium term.
– Economic Daily