Inflation in China unexpectedly accelerated in January as consumer spending jumped during the weeklong Lunar New Year holidays, limiting the room for monetary easing amid the ongoing euro area debt crisis.
Consumer prices rose 4.5% from a year earlier, the National Bureau of Statistics said today. That was more than the 4% forecast by the economists.
However, the inflation reading was distorted by the Chinese New Year holidays, as the festival had occurred in February the previous year.
The Chinese New Year holiday ran from Jan. 22 to Jan. 28 this year.
China’s consumer price index (CPI) had risen 4.1% in December, 4.2% in November, and 5.5% in October.
Food costs rose 10.5% in January from a year earlier, up from 9.1% in December, today’s report showed.
Data released today also showed that China’s producer price index (PPI) eased further, rising just 0.7% year-on-year during the month as compared to 1.7% in December. Economists had expected a 0.6% increase in January PPI.
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