China’s consumer-price inflation cooled sharply in January, with the National Bureau of Statistics reporting a year-on-year CPI increase of just 0.2%, down 0.6 percentage points from December. Officials and analysts blamed a calendar effect from the Spring Festival having fallen in January last year and a larger drop in energy prices driven by international oil-market moves.
Food prices were a major drag on headline inflation. Overall food costs fell 0.7% year-on-year after rising 1.1% in December; pork prices continued to decline, down 13.7% year-on-year though the pace eased slightly, while fresh vegetable prices rose 6.9%—a notable pickup but much weaker than last month’s surge.
Non-food inflation was modest, up 0.4% year-on-year and down from December, with services inflation easing to 0.1%. Stripping out food and energy, core CPI rose 0.8% year-on-year and 0.3% month-on-month—the strongest monthly increase in roughly six months—helped by a rebound in travel-related prices and everyday services such as housekeeping and haircuts.
Energy prices fell 5.0% in January, exerting a roughly 0.34 percentage-point downward drag on the headline CPI, a bigger pull than in December. That external factor underscores how volatile international commodity markets can translate quickly into China’s domestic inflation readings.
Analysts warn that the timing of the Lunar New Year complicates the month-to-month picture: the festival fell in January last year but in February this year, so January’s low base and February’s expected spike should be viewed together. Forecasters expect a sharp rebound in the February CPI to close to 1.0% year-on-year, with a combined January–February inflation rate of about 0.6%.
Taken together, the data suggest China remains squarely in a low-inflation environment. Forecasters now see 2026 annual CPI averaging near 0.5%, which would mark a fourth consecutive year of muted price growth and give policymakers substantial room to deploy growth-supporting measures without immediate inflationary alarm.