Business / Economy

China's inflation likely to rebound in Feb

(Xinhua) Updated: 2015-02-26 17:33

BEIJING - China's consumer inflation is likely to rebound slightly in February thanks to robust holiday consumption after a major measure slowed to a five-year low in the previous month, analysts said.

The consumer price index (CPI), the main gauge of inflation, will climb around 1 percent year on year in February but remain at low level, said Tang Jianwei, researcher with the Bank of Communications.

Tang believed the rise of food prices, which account for nearly one-third of China's CPI weighting, during the Spring Festival holiday will be a major driving force for inflation but the impact will be limited amid continued sluggish domestic demand.

Food prices will rise 2.2 percent on a month on month basis, but slower than a year ago, Tang said.

The forecast was shared by AVIC Securities, which expects CPI to edge up no more than 1 percent year on year due to weakening carryover effects.

China's CPI grew 0.8 percent year on year in January, marking the slowest pace since November 2009. The reading stirred concerns over looming deflationary pressures and fueled market hopes of further easing in monetary policies.

However, Tang said the authorities will maintain a balanced monetary policy that is neither easing nor tightening, and food prices will also stay calm.

The full year CPI in 2015 will be well below 2 percent, Tang said.

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