MNI BRIEF: China Feb CPI Turns Negative On Seasonal Factors

China's Consumer Price Index fell 0.7% y/y in February, marking the first contraction in 13 months, following January's 0.5% growth and missing the expected -0.4%, data from the National Bureau of Statistics showed on Sunday.

The CPI rose by 0.1% y/y when accounting for this year’s Spring Festival disruption, which occurred earlier than in 2024. 

Food prices, which fell 3.3% due to high base effects and warmer weather boosting supply, contributed a 0.6 percentage point drag to the headline figure, the largest negative factor along with cuts to car prices.

CPI fell 0.2% m/m, following January's 0.7% growth, the Bureau added.

PPI declined 2.2% y/y, narrowing from January’s 2.3% drop and marking the 29th consecutive negative reading, and missing the market consensus of a 2.0% decline. 

On a m/m basis, PPI fell 0.1%, compared to a 0.2% decline in January, as industrial production and construction activity were in the off-season, while oil-related components dropped amid a global downturn in prices.