Beijing: China's consumer inflation experienced a notable increase in January, spurred by heightened demand for travel, dining, and shopping during the Spring Festival holiday, the nation's most prominent celebration. The consumer price index (CPI), a crucial measure of inflation, rose by 0.5 percent year-on-year in January, up from a 0.1 percent increase in December, as reported by the National Bureau of Statistics (NBS) on Sunday.
According to Namibia Press Agency, NBS statistician Dong Lijuan attributed the year-on-year CPI rise to elevated service and food prices during the holiday, coupled with a rebound in gasoline prices. Specifically, service prices rose by 1.1 percent year-on-year last month, while food prices increased by 0.4 percent. On a monthly basis, the CPI expanded by 0.7 percent in January, with service prices contributing significantly, accounting for about 0.37 percentage points of the overall CPI increase.
In a broader context, the core CPI, which excludes volatile food and energy prices, saw a 0.6 percent increase year-on-year in January, up from a 0.4 percent rise in December 2024. The holiday economy demonstrated robust growth, with tourism and consumer spending reaching unprecedented levels. The Ministry of Culture and Tourism reported a record 501 million domestic tourist trips during the eight-day holiday, which ended on Tuesday, marking a 5.9 percent year-on-year increase. Tourist spending also hit a record high of over 677 billion yuan (approximately 94.42 billion U.S. dollars), representing a 7 percent increase from the prior year.
Additionally, key retail and catering enterprises monitored by the Ministry of Commerce (MOC) reported a 4.1 percent year-on-year increase in sales during the holiday, indicating sustained consumer momentum. MOC spokesperson He Yongqian highlighted the vibrant and thriving nature of the holiday consumer market, with strong momentum in service consumption during a press conference on Thursday.
To bolster domestic demand and support economic recovery, China initiated a significant program in 2024 to promote large-scale equipment upgrades and consumer goods trade-ins. This initiative encourages factories to replace outdated machinery with more advanced models while offering consumers subsidies on automobiles, home appliances, and more. Driven by these policies and enthusiastic consumer spending, particularly on food, festive goods, and smart home appliances, sales of home appliances and communication devices at key retailers tracked by the MOC increased by over 10 percent year-on-year.
As the policy promoting trade-ins for consumer goods continues to expand, and various consumption-boosting activities unfold, He Yongqian expressed optimism that the consumer market would maintain steady growth in the first quarter. Sunday's data also revealed that the country's producer price index (PPI), which measures factory gate costs, declined by 2.3 percent year-on-year in January, consistent with December's figures. On a month-on-month basis, the PPI dropped by 0.2 percent in January, a decrease attributed to the off-season industrial production during the holiday period by Dong.
Analysts predict that, bolstered by proactive macroeconomic policies and the steady recovery of domestic demand, both the CPI and PPI are likely to sustain moderate rebounds throughout 2025.