China's January inflation slowdown was broad-based

Consumer price inflation in January fell to 1.5 %, three-tenths of a percentage point lower than in December. Core inflation, which omits food and energy prices, fell also by three-tenths of a per cent to 1.9 %. The dampening of consumer price inflation was most affect by price trends in certain recreational services as well as in transport and telecom services. At least part of this is explained by the timing of the Chinese Lunar New Year holiday. Prices of certain consumer items typically rise during the holiday. Last year's celebration kicked off in January and this year in February, which had weakening effect on on-year price growth in January this year. Conversely, the later holiday this year may boost February's inflation figures.

The slowdown in producer price inflation that began last year continued in January. On-year growth in producer prices fell from 4.9 % in December to 4.3 % in January. Price cooling was strongest in industries and services related to production of coal and iron ore.