China's CPI Up 4.5% in January

(The Economic Observer, 2012-02-09) The National Bureau of Statistics announced earlier today that China's consumer price index (CPI) rose 4.5 percent year-on-year in January, an increase on the pace of growth registered in December, when the index rose by 4.1 percent compared to 12 months earlier.

The CPI was up 5.4 percent in 2011 from the previous year, well above the government's full-year inflation control target of 4 percent.

The inflation rate in January broke five-straight-month declines after the indicator hit a 37-month high of 6.5 percent in July 2011 amid government tightening measures, according to the NBS data.

According to the NBS, the CPI rose 4.5 percent in urban areas and 4.6 percent in rural areas. The rate of year-on-year increase in food prices picked up to 10.5 percent in January from an increase of 9.1 percent in December, contributing 3.29 percentage points to the overall growth in the indicator. The price of meat, poultry and related products increased 18.7 percent year-on-year, contributing 1.28 percentage points to the overall increase in CPI. This was more than the 16.6 percent year-on-year increase in the price of meat, poultry and related products registered in December but not quite as fast as the 19.6 percent increase in November.

According to the NBS, the pace at which the cost of housing increased moderated slightly in January. Housing-related prices were up by 1.9 percent which was less that the 2.1 percent rate registered in December.

The producer price index (PPI), another measure of inflation at the wholesale level, rose 0.7 percent in January year-on-year, down from the 1.7 percent increase in December and a sharp drop in pace from the 5.0 percent increase that the NBS reported for November.