Chinese consumer price inflation (CPI) accelerated sharply January, providing tentative evidence that disinflationary forces may be ebbing for the moment.
According to China’s National Bureau of Statistics, CPI rose by 1.8% in the 12 months to January, marking the fastest annual acceleration seen since August 2015.
Although above the recent trough of 1.3% seen in October 2015, and the third month in a row that the annual pace had quickened, the figure missed expectations for an increase to 1.9%.
Excluding food prices, inflation rose to 1.2%, the fastest annual pace seen since June 2015.
While the CPI missed expectations, producer price inflation, or PPI, beat expectations, falling by 5.3% from a year earlier.
Though prices have fallen for the past 47 months, the figure was a sharp an improvement on the 5.9% decline of December and forecasts for a contraction of 5.4%.
Encouragingly, it also marked the slowest annual decline since June last year.
With inflation quickening and producer price deflation weakening, the chances of the People’s Bank of China adding to monetary policy stimulus in the months ahead have diminished following today’s report.
While inflationary pressures remain tepid, given large falls in commodity prices over 2015 will exist the data series at the year progresses, the grounds for a further pickup in price pressures appears to be building.