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BEIJING, March 9 (TMTPOST) —— China's consumer price index (CPI) in February rose by 1.0% year-on-year, 1.1 percentage points lower than that in January, rising at the slowest pace in a year, according to the data released by the National Bureau of Statistics on Thursday.

The core CPI excluding food and energy prices rose by 0.6% year-on-year, down 0.4 percentage points, the same as in September-November 2022 and the lowest growth pace since April 2021, indicating that demand remains sluggish. The PPI fell 1.4 percent, the lowest level since December 2020.

The producer price index (PPI), driven by the accelerated recovery of industrial enterprises' production and the improvement of market demand, turned from a month-on-month decline to a flat level.

The year-on-year increase in the CPI fell in February, mainly due to the decrease in consumer demand after the Spring Festival and the high base which is affected by the fact that the Spring Festival in 2022 was in February. Despite the recovery in China’s domestic demand and the rebound in some commodity prices, the year-on-year decline in the PPI widened in the month, restrained by a high base for the same period in 2022.

The year-on-year increase of CPI and PPI is lower than market expectations. According to a recent Caixin survey of 14 institutions, economists' average forecast for February's year-on-year CPI growth is 1.8%, with the forecasts ranging from 1.2% to 2.2%, meaning that the actual CPI growth is below the lower end of the forecast range. The average forecast for February's year-on-year PPI growth is -1.2 percent, with forecasts ranging from -1.5 percent to -0.9 percent.

Food prices rose 2.6% year-on-year in February, down from 3.6 percentage points in January, contributing about 0.48 percentage points to the year-on-year CPI increase.  The increase in the supply of pork and dropped consumption after the holiday led pork prices to increase by 3.9% year on year. Prices of fresh fruit, eggs, and poultry also descended. Prices of fresh vegetables and aquatic products fell from a year-on-year increase.

China saw a 0.6 percentage points year-on-year decrease in February in non-food prices, contributing about 0.50 percentage points to CPI growth. The growth of service prices fell 0.4 percentage points to 0.6%, with the year-on-year growth of air tickets and tourism prices falling sharply. Energy price growth decreased by 2.4 percentage points to 0.6%.

CPI turned from an upswing in January to a downswing in February, falling 0.5% year over year, 1.3 percentage points lower than the number in January

Food prices changed from a 2.8% increase in January to a 2.0% decrease in February, resulting in a CPI month-on-month decline of about 0.38 percentage points. Pork and fresh vegetable prices decreased by 11.4% and 4.4% respectively, which contributes about 0.28 percentage points to the CPI month-on-month decline.

Non-food prices also turned from growth to decline on a month-on-month basis, down 0.2%, 0.5 percentage points lower than the previous number. Prices of most services fell seasonally after the holidays, with air tickets, transportation rental fees, and travel prices dropping by 12.0%, 9.5%, and 6.5%, respectively.