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China's CPI grew 2.3 percent in February

Date: 2016-03-14
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China's consumer prices grew 2.3 percent in February from one year earlier, up from January's 1.8 percent, according to data from the National Bureau of Statistics on Thursday. That is the biggest rise since July 2014.

The reading beat expectations as economists from the Bank of Communications and China Merchants Bank forecast a 1.8-percent year-on-year increase for February.

Meanwhile, producer prices slid 4.9% year-on-year in February, compared to a 5.3% fall in January. The drop was the smallest in eight months.

HSBC analyst Qu Hongbin attributed the higher-than-expected CPI growth largely to high food inflation.

Food prices, which account for one-third of the CPI calculation, soared 7.3 percent year on year while non-food inflation edged up 1 percent.

Pork prices jumped sharply by 25.4 percent year on year, contributing 0.59 percentage point of CPI growth, while vegetable prices skyrocketed by 30.6 percent, accounting for 0.86 percentage point of CPI growth.

NBS statistician Yu Qiumei said that vegetable and pork prices went up due to supply shock during a cold in February and demand for pork and transportation rose around the Lunar New Year holiday, while service prices had increased along with labor costs.

Since this January, CPI data has been based on a new comparison base that takes into account new products and services, reflecting a change in the consumption pattern, according to the NBS. The adjustment slightly tuned down the weight of food.

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