CPI Photo:VCG

China's consumer prices are expected to rise moderately by a small range in the coming months, with numerous factors contributing to driving the overall recovery of social demand, Sheng Laiyun, deputy director of the National Bureau of Statistics (NBS) said on Tuesday.

He was responding to a media question over the future trend on China's consumer price index (CPI), the main gauge of inflation, as the March reading fell short of market expectations.

The continuously improving economy and rebounding demand will be the deciding factor to support the CPI growth, Sheng said, adding that the prices for some agricultural produce reaching an inflection point, rising holiday consumption and other factors will contribute to growing price levels later. 

In March, China's CPI rose by 0.1 percent year-on-year but dropped 0.1 percent month-on-month, while the growth rate fell 0.6 percentage points compared with last month. The reading came as a seasonal decline after the Spring Festival holidays with a price fall in broad service items such as travel products and flight tickets, leading to an overall decrease in non-food prices, Sheng noted. 

And, sufficient supply of agricultural produce thanks to warmer weather resulted in a monthly decline of 3.2 percent in food prices last month, which dragged down the CPI by nearly 0.6 percentage points. The seasonal decline in food prices and non-food prices caused the month's CPI to drop significantly on a monthly basis, Sheng added. 

The reading highlighted the need for more government stimulus to shore up demand, while an expected stronger economic recovery and pickup in energy and raw material prices will lead to a moderate rise of CPI in the coming months, Chinese economists said.

Despite the decline in March, China's CPI has remained largely stable. Core CPI excluding the impact of food and energy prices stood at 0.7 percent in the first three months, which remained at a similar level as the fourth quarter of last year. Meanwhile, the CPI in the first three months of 2024 was 0.3 percentage points higher than the last quarter of 2023 from a quarter-on-quarter comparison. 

The pattern of the CPI dots in the first quarter has displayed a more structural change, Sheng said. For instance, the food prices fell by 3.2 percent and the transportation prices fell by 1.4 percent, while the price for other sectors from clothing to education increased. Among them, the price indexes for clothing and some other sectors grew by more than 1.5 percentage points. 

Global Times