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China inflation rebounds to above 1 per cent, driven by rise in food costs

BEIJING, China – China’s inflation rebounded to above 1 per cent in February, driven by a faster rise in food costs.

Data on Tuesday showed consumer prices rose 1.4 per cent in February over a year earlier, up from January’s 0.8 per cent rate. Food prices rose 2.4 per cent.

Low inflation gives Beijing room to stimulate the slowing economy with less danger of triggering a politically dangerous rise in living costs.

Julian Evans-Pritchard of Capital Economics said in a report that February’s seasonal pick-up in food inflation will likely prove short-lived.

Capital Economics still expects inflation to fall back below 1 per cent in coming months

Producer prices, measured as goods leave the factory, fell 4.8 per cent from a year earlier, extending a long period of declines due to excess production capacity in many industries.