• China factory gate prices for January dropped more than economists anticipated.
• The PPI fell by 0.8% from a year earlier and outpacing the 0.5% decline predicted in a poll.
• China’s cost of living will increase over the upcoming months.

China factory gate prices for January dropped more than economists anticipated, indicating that upstream industries are not yet strong enough to revive the domestic demand that briefly pushed consumer prices when the zero-Covid policy ended.

The producer pricing index (PPI) fell by 0.8% from a year earlier, extending the previous month’s 0.7% down and outpacing the 0.5% decline predicted in a poll.

Data from the National Bureau of Statistics (NBS) on Friday revealed that the consumer price index (CPI) was 2.1% higher than a year earlier in January, up from the 1.8% annual gain observed in December, but just short of the 2.2% increase economists had projected in a poll.

According to economists, China’s cost of living will increase over the upcoming months, with inflation moving closer to the government’s 3% objective.

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