CONSUMER prices rose at their highest rate in more than eight years in January, official data showed yesterday, while factory-gate prices snapped six months of year-on-year declines.

The consumer price index (CPI), a key gauge of retail inflation, came in at 5.4 percent last month year on year, up from 4.5 percent in December — with prices of pork and fresh vegetables pushing up costs.

Food prices spiked 20.6 percent while the pork prices rose 8.5 percent month on month.

The overall monthly figure exceeded the 4.9 percent forecast by analysts in a Bloomberg survey and is the highest since October 2011 when CPI inflation was 5.5 percent.

“The year-on-year increase has been affected not only by Spring Festival-related factors but also ... by the new coronavirus as well,” said the National Bureau of Statistics yesterday.

Analysts expect the measures to contain the spread of the virus over the Lunar New Year holiday, which started in late January, to keep prices high longer than usual.

“Some food supplies may spoil before shipping to large cities due to the disruption of transportation and other lockdown measures, especially for fruits, vegetables and livestock,” said Lu Ting of Nomura in a research note yesterday.

“People also tend to hoard food and other supplies in this kind of situation. The hoarding will most likely push up prices.”

UOB’s head of research Suan Teck Kin said that while prices tend to fall after the Lunar New Year break, “this year, prices may continue to stay high” because of supply chain disruptions.

The producer price index — an important barometer of the industrial sector that measures the cost of goods at the factory gate — rose 0.1 percent in January. It had fallen 0.5 percent in December.

Analysts attributed the rise to improving activity in the industrial sector at the end of last year, buoyed by a trade truce with the United States and government stimulus, which finally appeared to gain traction.

However, those gains are not expected to be sustained amid growing economic headwinds from the coronavirus.

“Notwithstanding different coronavirus scenarios, we maintain our view that China’s mini-cycle recovery will be delayed, but not derailed,” said economists at Morgan Stanley in a note yesterday.(SD-Agencies)