China Sees 0.2 Percent Increase in Consumer Prices

(MENAFN) The world's second-largest economy continued battling deflationary pressures in January as consumer inflation barely budged and factory-gate prices extended their downward spiral, official data revealed Wednesday.

The National Bureau of Statistics reported consumer prices climbed just 0.2% year-on-year, while producer prices tumbled 1.4%, underscoring persistent weakness in domestic demand.

January's consumer price reading marked a sharp deceleration from December's 0.8% gain, signaling renewed fragility in household spending. Producer deflation eased slightly compared to the prior month's 1.9% contraction but remained firmly in negative territory.

Core inflation—stripping out volatile food and energy components—registered 0.8% annually, while food costs dropped 0.7% and energy prices plunged 5% during the period.

Consumer price growth, the primary gauge of inflationary pressure, has languished below the 1% threshold since March 2023. Annual inflation registered a mere 0.2% in both 2023 and 2024, before flatlining entirely in 2025.

Confronting this protracted deflationary cycle, the Chinese government slashed its annual inflation target from the customary 3% benchmark to 2% for the current year—a rare acknowledgment of the economy's structural headwinds and weakened pricing power.

The persistent price stagnation raises concerns about consumption patterns and potential debt-deflation risks in the manufacturing-heavy economy.

MENAFN11022026000045017169ID1110725289