China’s January CPI, PPI Miss Estimates

Investing.com - China’s January Consumer Price Index (CPI) and Producer Price Index (PPI) both missed expectations, the National Bureau of Statistics reported on Friday.

The country’s CPI, a key indicator to measure inflation and changes in purchasing trends, rose 1.7% in January from a year earlier, slower than the 1.9% increase in December and below market expectations for a 1.9% rise.

Meanwhile, the PPI rose 0.1% year-on-year in January, the weakest pace since September 2016 and slowing from the previous month's 0.9% increase.

The data raised concerns of heightened deflationary risks and could hurt corporate profitability.

However, tame inflation also gives authorities more flexibility to ease monetary policy which would in turn help supporting economic growth.

"With factory-gate deflation likely to deepen in the coming months, we expect policymakers to roll out further measures to ease financial pressure on industrial firms, including cuts to benchmark lending rates," said Julian Evans-Pritchard, senior China economist at Capital Economics, in a Reuters report.

China’s Shanghai Composite and the Shenzhen Component fell 0.6% and 0.3% by 11:03 PM ET (04:04 GMT) following the release of the data.

On Thursday, China reported better-than-expected January trade data, but analysts said the positive data was likely due to seasonal factors and business distortions caused by the long Lunar New Year holidays.

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