CHINA’S consumer prices will likely to rise modestly in January as declining fruit and egg costs offset increases in grain prices.

    The consumer price index (CPI), a main gauge of inflation, is expected to hit 2.6 percent in January, higher than the 2.1 percent increase in December, according to forecasts by four financial institutions.

    Because of the warm weather, vegetable prices remained largely stable last month. Prices of fruits and eggs fell, offsetting the increase in grain prices, said an analyst with the China Securities.

    Food prices account for about one-third of China’s CPI.

    The producer price index (PPI), a measure of inflation at wholesale level, is forecast to fall 0.2 percent month on month in January, as prices of raw materials dipped.

    The official purchasing managers’ index (PMI) came in at 51.3 in January, 0.1 lower than in December.

    Chen also expects the country’s monetary policy to be neutral in 2017, ruling out the possibility of sharp tightening or loosening.

    The National Bureau of Statistics is set to announce January CPI and PPI today, along with other economic indicators.(Xinhua)