February CPI Growth Hits 3-Year High, Statistics Bureau Responds to New Changes in Price Movements

At a press conference held by the State Council Information Office on Monday, spokesperson Fu Linghui responded to the reasons behind the 3-year high year-on-year increase in the Consumer Price Index (CPI) in February, as well as the overall trend of prices moving forward.

Fu Linghui pointed out that the record high CPI increase in February was mainly due to three factors. First, there was a significant rise in service prices. Influenced by the long Spring Festival holiday this year, residents’ travel, visiting relatives, and outdoor activities increased markedly.

“This year’s Spring Festival had a notable feature: many residents first returned home and then traveled, which drove up transportation, accommodation, and catering service prices. In February, prices for airline tickets, vehicle rentals, and vehicle repairs and maintenance rose by 29.1%, 19.8%, and 12% respectively year-on-year. Related travel agency fees, hotel accommodation, and takeout food prices increased by 12.5%, 5.4%, and 5.6% respectively,” Fu said.

He added that influenced by these factors, service prices in February rose by 1.6% year-on-year, significantly faster than in January, contributing about 0.75 percentage points to the CPI increase that month, making it the biggest factor affecting CPI growth.

Second, food prices shifted from decline to rise. Fu explained that during the Spring Festival holiday, increased gatherings and visiting relatives boosted food demand, leading to higher prices for related goods. In February, fresh vegetables, beef, mutton, and fresh fruit prices increased between 5.9% and 10.9%, with growth rates higher than the previous month. Correspondingly, food prices in February changed from a 0.7% year-on-year decline in the previous month to a 1.7% increase, contributing about 0.3 percentage points to the CPI rise that month. The combined impact of services and food accounted for roughly 1 percentage point of the CPI increase.

Third, the price increase of industrial consumer goods expanded. Fu noted that in February, industrial consumer goods prices rose by 1.1% year-on-year, an increase of 0.2 percentage points from the previous month. Prices for household appliances, household miscellaneous goods, and clothing rose by 5.3%, 2.6%, and 2% respectively.

Fu emphasized that considering the significant influence of the Spring Festival on February’s CPI, the data for January and February can be compared together. The year-on-year increase for the combined two months was 0.8%, the same as in December last year, but larger than in the fourth quarter and the whole of last year, showing a moderate upward trend.

He stated that a reasonable recovery in residents’ consumption prices is beneficial for improving business operations, promoting employment and income growth, and supporting economic circulation.

Looking ahead, Fu said that although recent international energy price fluctuations have brought some imported effects to domestic prices, China’s supply capacity for goods and services remains sufficient, and the foundation for price stability has not changed.

“With the implementation of more proactive macro policies, continued expansion of domestic demand, supply-side reforms, the development of income-increasing plans for urban and rural residents, cultivation of new consumption scenarios, and further improvement of the consumption environment, the outlook for price stability will continue to improve,” Fu said.

Yuan Haixia, President of the China Chengxin International Credit Rating Co., Ltd., told Jiemian News that CPI is expected to further moderate this year. Among non-core items, considering the slow pace of pig herd reduction and the increase in global crude oil inventories, pork and oil prices may remain low. The core CPI, supported by the elasticity of service consumption recovery, is projected to grow by about 0.5%.

Wang Yunjin, Chief Financial Researcher at the Guangkai Chief Industry Research Institute, told Jiemian News that the February price trend showed a healthy pattern of consumption recovery and industrial repair, remaining within a moderate and reasonable range, consistent with expectations of steady macroeconomic recovery.

He analyzed that as the seasonal effects of the Spring Festival gradually fade, short-term price increases may stabilize starting in March. However, core positive factors such as the recovery of consumer demand, industrial upgrading, and continued macro policy efforts will persist, supporting prices to stay within a reasonable range.