China faces uphill battle to boost demand despite consumer price recovery in January

The consumer price index (CPI), a major indicator of inflation, rose by 0.5 per cent year on year last month, the National Bureau of Statistics (NBS) said on Sunday, following a 0.1 per cent increase in December. The figure is in line with the average estimate in a poll of economists by financial data provider Wind.

The index was up 0.7 per cent from December, the highest month-on-month rise in more than three years.

Meanwhile, the producer price index (PPI), which tracks prices at the factory gate, fell by 2.3 per cent in January, marking the 28th consecutive monthly decline. The Wind poll had predicted a year-on-year fall of 2.07 per cent last month.

The price of consumer goods rose by 0.1 per cent year on year last month, while the price of services increased by 1.1 per cent.

Food prices increased by 0.4 per cent year on year in January, while non-food prices climbed by 0.5 per cent.