Beijing: The decline in China's consumer prices in February was mainly driven by the effects of the Spring Festival holiday and fluctuations in global commodity prices, the National Bureau of Statistics (NBS) said on Sunday. China's consumer price index (CPI), a main gauge of inflation, was down 0.7 percent year on year in February, the NBS reported.
According to Namibia Press Agency, the prices in both urban and rural areas decreased by 0.7 percent from one year earlier, as indicated by NBS data. In further detail, food prices fell 3.3 percent year on year, non-food prices slightly declined by 0.1 percent, consumer goods prices decreased by 0.9 percent, and service prices slipped 0.4 percent last month. The average national consumer price from January to February decreased by 0.1 percent compared to the same period last year. On a monthly basis, the CPI dropped 0.2 percent in February.
NBS statistician Dong Lijuan explained that the year-on-year CPI decline in February was largely due to a higher base in the same month last year. Last February, food and service prices increased significantly during the Spring Festival holiday, creating a high base effect contributing to this year's decline. The Spring Festival follows the traditional lunar calendar, causing it to fall on different dates around late January or early February each year. In 2024, the festival fell in February, driving up food and service prices; in contrast, it fell in January this year.
Moreover, the price of fresh vegetables in February dropped by 12.6 percent year on year, as favorable weather conditions supported vegetable growth and transportation, further contributing to the CPI decline, Dong explained. Additionally, prices for fossil fuel cars and new energy vehicles plunged 5 percent and 6 percent year on year, respectively, due to promotions and discounts, which also weighed on the CPI decline, Dong noted. After adjusting for the effects of the Spring Festival holiday, the CPI rose by 0.1 percent year on year in February, and the trend of moderate price recovery remains unchanged.
Furthermore, China's producer price index (PPI), which measures costs for goods at the factory gate, went down 2.2 percent year on year in February, as per the NBS data. The decline in February was 0.1 percentage points less than the previous month, according to the NBS. Prices in the ferrous metal smelting and pressing industry fell 10.6 percent year on year due to weakening demand for building materials around the Spring Festival holiday. Additionally, due to adequate coal supply during the holiday, coal processing prices fell 24.7 percent year on year. Fluctuations in global oil prices have driven a decline in domestic oil-related industry prices, with oil exploitation prices dropping by 5.1 percent year on year. Meanwhile, as macroeconomic policies gradually took effect, production demand in certain industries increased, leading to a slowdown in the decline of the PPI, Dong said.