THE country’s consumer prices rose in December after briefly declining in the previous month, while factory gate deflation eased further, providing more evidence of the country’s economic recovery.

China’s consumer price index (CPI), a key gauge of retail inflation, rose by 0.2 percent in December from a year earlier due to food price increases and rising demand amid festivals, the National Bureau of Statistics (NBS) said yesterday.

The figure reversed the negative territory of -0.5 percent in November, which was the first decline since 2009.

A previous poll expected the index to rise by 0.1 percent. And 14 Chinese institutions collected by the Wind Information database also showed an average forecast of 0.1 percent for December’s CPI.

The production, storage and transportation costs of vegetables and fruits have increased due to the cold weather. The New Year holiday and the coming Spring Festival also drive consumer demand, said Dong Lijuan, a senior statistician with the NBS.

Vegetables and food prices both rose by 6.5 percent year on year in December, and the prices of beef and mutton both rose by 4.6 percent. The price of aquatic products rose by 1.7 percent, while the price of livestock meat rose by 0.6 percent year on year, NBS data showed.

“The rise in CPI was mainly driven by the rebound of pork prices,” said Lu Ting, chief China economist at Nomura.

In month-on-month terms, pork price inflation turned positive in December, rising to 6.5 percent in December from -6.5 percent in November, well above its December 2019 print (-5.6 percent), he added.

Of the non-food categories, transportation and communication price inflation dropped by 3.1 percent year on year in December. Medical and health care prices rose by 1.3 percent, while education, culture and entertainment prices rose by 0.9 percent year on year in December, data showed.

For the whole year, the CPI rose by 2.5 percent year on year in 2020.

The producer price index (PPI), which measures goods cost at factory gate, fell by 0.4 percent from a year earlier in December, easing from the 1.5 percent drop in November, and beating the previous poll of 0.8 percent decline.

On a monthly basis, PPI rose 1.1 percent in December after increasing 0.5 percent in November, pointing to improving corporate profitability.

Prices for raw materials fell 1.6 percent from a year ago, compared with a decline of 4.2 percent in the previous month.

(SD-Agencies)