China saw a surge in both consumer and producer price inflation in January, a report by National Bureau of Statistics says.
Beijing’s official consumer price index (CPI), a measure that examines the weighted average of prices of a basket of consumer goods and services, rose 2.5% year-on-year in January.
The index was not only greater than the 2.1% rise seen in December, but was also more than the 2.4% rise predicted by a Reuters analyst poll. The country saw the strongest gain seen in nearly three years.
CPI is calculated by taking price changes for each item in the predetermined basket of goods such as transportation, food and medical care and averaging them.
Meanwhile, the producer price index (PPI), a weighted index of prices measured at the wholesale or producer level, rose 6.9% year-on-year in January.
The index shows trends within the wholesale markets, manufacturing industries and commodities markets, and was greater than the 5.5% rise seen in December. It was also more than the 6.3% expected by markets and marked the fastest pace of expansion since August 2011.
The latest numbers show that the world’s second-largest economy has made sustained recoveries in productivity.
According to Reuters, inflation expectations have grown since mid-2016 in most major developed economies, except Japan. This is said to be in line with a global recovery being seen in manufacturing, which has boosted prices of commodities such as crude oil and iron ore.
The inflation data also come just days after Beijing reported its manufacturing purchasing managers index (PMI) and non-manufacturing purchasing managers index for January. PMI came in at 51.3 percent, a slight decrease of 0.1 percentage point over December.
Meanwhile, the non-manufacturing PMI was at 54.6% in the first month of 2017, which is 0.1% more than December. Both these measures also indicated a continuation of a steady and positive growth momentum in the Asian country.