China's February CPI Rises 1.3%... Highest in Three Years on 'Lunar New Year' Effect
by Oh Suyon
Published 09 Mar.2026 14:05(KST)
PPI Falls by 0.9%
Outlook Uncertain After March
"Inflationary Pressure Mounts with Surging Oil Prices"
China's consumer price index (CPI) last month recorded its highest increase in three years, driven by the impact of the Lunar New Year (Chunjie), the country's biggest holiday.
According to the National Bureau of Statistics of China on March 9, last month's CPI rose by 1.3% compared to the same month last year.
This figure surpasses the expert forecasts compiled by Reuters (0.8%) and Bloomberg (0.9%), and is also higher than the increase recorded in January (0.2%).
Bloomberg reported that the February CPI growth rate was the highest in three years. CNBC explained that this was due to increased consumer spending during the extended holiday, as well as the easing of deflationary pressure on factory gate prices.
China's CPI had been in negative territory until the third quarter of last year, but switched to positive growth in October (0.2%) and has now risen for five consecutive months through February 2026.
China's February CPI also rose by 1.0% compared to the previous month, exceeding the Reuters forecast of 0.5%.
The sharp rise in food prices due to the Lunar New Year effect last month is considered to have contributed to the CPI increase. In February, food prices jumped 1.7% year-on-year, while non-food prices rose by 1.3%. Among foods, prices of fresh vegetables (10.9%), seafood (6.1%), and fresh fruit (5.9%) saw particularly significant increases.
This year, the Lunar New Year holiday fell later than usual, in mid-February, and lasted for nine days-one day longer than last year. Authorities released consumption stimulus subsidies totaling 2.05 billion yuan during the holiday to boost domestic demand.
Meanwhile, last month's producer price index (PPI) fell by 0.9% year-on-year, marking a decline for the 41st consecutive month. However, the drop was smaller than the Reuters forecast of -1.2%, and the decline narrowed compared to the previous month (-1.4%). According to Bloomberg, this is the smallest drop since July 2024 (-0.8%).
Although the February CPI and PPI figures suggest some easing of deflation, it remains unclear whether this trend will continue in March. Zhang Zhiwei, chief economist at Pinpoint Asset Management, noted, "The increase in service sector prices during the Lunar New Year period was greater than the market expected," adding, "It is uncertain whether this effect will persist after the holiday."
Soaring oil prices due to the war involving the United States, Israel, and Iran are also a source of concern for inflation. On this day, international oil prices exceeded USD 100 per barrel. Lin Song, chief China economist at ING Bank, said, "There is a possibility of additional inflationary pressure in March due to the surge in oil prices," but added, "Unless the oil price shock is larger and more prolonged than expected, it is unlikely that inflation will significantly constrain the People's Bank of China's monetary easing this year."
At the opening session of the National People's Congress on March 5, the Chinese government set this year's CPI growth target at around 2%, signaling its determination to boost the economy. Amid persistent deflationary pressure and geopolitical uncertainty, the government also lowered the lower end of its GDP growth target for this year to 4.5-5%.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.