How is China’s CPI trend in January?

Data released by the National Bureau of Statistics of China on February 9 showed that in January 2025, China’s consumer price index (CPI) rose by 0.5% year-on-year and 0.7% month-on-month. Experts said that the release of the Spring Festival holiday effect and the boost to total demand from previous policies have jointly driven the continuous improvement of the core CPI.

From a month-on-month perspective, the rise in service and food prices is the main factor affecting the month-on-month increase in CPI. From a year-on-year perspective, the price of services and food has increased significantly due to the Spring Festival being in the wrong month, and the rebound in gasoline prices has jointly affected the expansion of the year-on-year increase in CPI.

Dong Lijuan, chief statistician of the Urban Department of the National Bureau of Statistics, said that in January, affected by the Spring Festival, the national CPI increased, from the previous month to a month-on-month increase of 0.7%, and the year-on-year increase increased from 0.1% in the previous month to 0.5%. The core CPI, excluding food and energy prices, has rebounded for the fourth consecutive month, rising by 0.5% month-on-month and 0.6% year-on-year in January, both of which have increased compared with the previous month.

Wang Likun, a researcher at the Institute of Market Economy of the Development Research Center of the State Council, believes that the core CPI is relatively more able to reflect the changes in total economic demand among many price indicators. The core CPI has gradually stabilized and rebounded, indicating that my country’s total demand is expected to gradually improve.

Wen Bin, chief economist of China Minsheng Bank, analyzed that food prices rose by 1.3% month-on-month in January, lower than the average level of 1.9% in the same period of the past 10 years. The rise in food prices is mainly due to the increase in residents’ stockpiling of New Year’s goods on the eve of the Spring Festival, and the drop in temperature in many places has affected the production and storage of agricultural products, which has pushed pork prices to stop falling and rebound, and further pushed up the prices of short-cycle foods such as fresh vegetables and fruits.

Non-food prices rose by 0.6% month-on-month, which is stronger than the average of 0.3% in the same period of the past 10 years. Driven by the holiday effect, residents’ enthusiasm for tourism has increased, and their willingness to consume has increased, which has promoted the consumption of services such as tourism, entertainment, and catering, and led to a month-on-month increase in service prices of 0.9%, an increase of 0.8 percentage points from the previous month. During the Spring Festival, residents’ consumption enthusiasm was high, and a new round of old-for-new exchange was launched. The prices of durable consumer goods such as transportation tools and household appliances performed better than seasonal.

Looking forward to the next stage, Wen Bin predicts that the year-on-year increase in CPI may decline slightly. With the end of the Spring Festival holiday, consumption in travel, catering, movies, etc. will decline. After the Spring Festival, the demand for meat has declined, and the prices of main feeds such as soybean meal and corn are at a low level. It is expected that pork prices will weaken, and the prices of fresh vegetables and fruits will also fall due to the rise in temperature.

Liu Fang, a researcher at the Market and Price Research Institute of the National Development and Reform Commission, believes that as the economy continues to recover, indicators such as income, employment, and consumption willingness will continue to improve, which will support the continued recovery of residents’ consumption demand and promote the continued moderate recovery of the overall price level.