Due to the Impact of COVID-19, Living Costs in China Surge... February CPI Increase Rate at 5.2% (Comprehensive)

[Asia Economy Beijing=Special Correspondent Park Sun-mi] Due to the impact of COVID-19, China's inflation rate surged sharply in February.

On the 10th, China's National Bureau of Statistics announced that the Consumer Price Index (CPI) in February rose by 5.2% compared to the same period last year. Although this is slightly lower than the 5.4% increase in January, it still exceeds 5%, significantly surpassing the Chinese government's usual inflation control target of 3%.

Food prices rose by 21.9%, driving the overall inflation. Among food items, pork prices increased the most, as supply and demand had already tightened due to African Swine Fever. Pork prices in February rose by 135.2% compared to the same period last year. Prices of other meats such as beef (21.1%) and lamb (11.2%) also increased. Vegetable prices rose by 10.9% as well.

The Chinese Bureau of Statistics stated that the sudden outbreak and spread of COVID-19 in China affected the inflation rate. Due to the spread of COVID-19, logistics and population movement were controlled, causing the costs necessary to supply daily necessities in the right place at the right time to surge. They added that the city lockdown measures implemented to prevent the spread of COVID-19 led to hoarding behavior among Chinese consumers for certain products, which also contributed to the price surge.

Considering that the one-year loan prime rate, which serves as China's benchmark interest rate, is currently at 4.05%, the adjusted interest rate reflecting the current inflation rate is negative.

On the other hand, the Producer Price Index (PPI) in February fell by 0.4% compared to the same period last year. The PPI, which reflects prices of raw materials, intermediate goods, and product shipment prices, is considered one of the leading economic indicators showing vitality in sectors such as manufacturing. The negative PPI reading indicates a decline in the vigor of the Chinese economy. The Purchasing Managers' Index (PMI), which indicates manufacturing business conditions and was announced earlier, also dropped to 35.7 in February, marking a record low. Additionally, exports in January and February decreased by 17.2% compared to the same period last year, showing the impact of COVID-19.

Concerns are growing that China's economic growth rate will significantly decline this year due to the effects of COVID-19. Global credit rating agency Moody's recently lowered its forecast for China's economic growth rate this year from 5.2% to 4.8% in its World Economic Outlook report.

This content was produced with the assistance of AI translation services.