China Inflation (PPI, ann. var. %, eop)

Inflation drops to lowest level since February 2022 in February

Consumer price inflation came in at 1.0% in February, which was down from January’s 2.1% and undershot market expectations. February’s figure represented the lowest inflation rate since February 2022. While the reading was likely partly distorted by the Lunar New Year, a weak property sector, lower international energy prices and soft wage pressures likely also played a role.

The trend was unchanged, with annual average inflation coming in at January’s 2.1% in February. Meanwhile, producer prices fell 1.4% on an annual basis in February, which was a steeper fall than January’s 0.8% decrease.

Lastly, consumer prices fell 0.50% in February over the previous month, contrasting the 0.80% rise seen in January. February’s result marked the weakest reading since March 2021.