China's CPI likely to ease in January

Despite rising food and oil prices, China’s inflation growth was likely to ease in January due to a high base a year ago, the Bank of Communications said in a report.

BoCom predicted the consumer price index, a main gauge of inflation, will dip to 1.4 percent year on year in January from the 1.8 percent growth in December.

Food prices grew markedly from a month ago as rain and snow across the country dampened the output of vegetables and other farm produce, according to the report.

Meanwhile, price spikes in domestic refined oil drove up the CPI’s non-food sub-index as global crude prices hit the highest level in nearly three years last month.

But January’s CPI will still moderate year on year as the price rises were offset by a high base in the same period of 2017, when consumer prices picked up by the fastest pace in two and a half years.

China’s inflation has stayed subdued since last February, mainly due to stable food prices, with the full-year growth at only 1.6 percent, below the government’s annual inflation target of around 3 percent.

BOCOM sees consumer prices to continue the mild trend this year, up 2 percent.