UBS: China’s February CPI to rise 3.6%

China’s consumer price index (CPI), a main gauge of inflation, is expected to rise 3.6 percent in February, down from January’s 4.5-percent increase, the UBS AG forecast.

The remarkable pullback was due to continuous declines in food prices, which has a nearly one-third weighting in the calculation of China’s CPI, Wang Tao, a Chinese economist at UBS AG, said in a report.

It was widely expected that the country’s CPI increase would be lower than 4 percent in February, which was also because of a high comparison base from last year.

The country’s CPI climbed 4.9 percent year-on-year last February because of the Lunar New Year effect. Prices often pick up due to heightened demand for goods and services during the holiday. The holiday effect also drove the CPI growth rebound in January of this year from December’s 4.1-percent rise.

However, the CPI for non-food items will inch up in February compared with one year ago, following fuel price hikes, Wang said.

Wang expected the country’s producer price index to increase 0.2 percent year-on-year last month, down from the 0.7-percent growth registered in January.

The National Bureau of Statistics is scheduled to release February’s key economic data on March 9.


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