Economic Watch: China's CPI logs monthly increase as consumer demand recovers

People select vegetables at a supermarket in Pingyi County, east China's Shandong Province, July 10, 2023. (Photo by Wu Jiquan/Xinhua)

BEIJING, Aug. 9 (Xinhua) -- China's consumer price index (CPI), a main gauge of inflation, registered a monthly increase of 0.2 percent in July thanks to continued recovery of consumer demand, the National Bureau of Statistics (NBS) said Wednesday.

In breakdown, food prices declined 1 percent month on month, but the prices of non-food items rose 0.5 percent on a monthly basis.

Among the non-food items, services prices rose 0.8 percent month on month, widening 0.7 percentage points compared with that in June.

Services prices were mainly driven by a rise in the prices of travel services following significant increases in summer travel, said NBS statistician Dong Lijuan.

The prices of air tickets, tourism and hotel accommodation rose by 26 percent, 10.1 percent and 6.5 percent, respectively, on a monthly basis.

The prices of industrial consumer goods rose 0.3 percent month on month, reversing a 0.4-percent decline in the previous month.

On a yearly basis, the country's CPI declined 0.3 percent due to a high base in the corresponding period of 2022, according to Dong.

The core CPI, deducting food and energy prices, rose 0.8 percent year on year, with the pace of increase widening by 0.4 percentage points compared with that in June.

The average CPI from January to July increased by 0.5 percent year on year.

According to Dong, the year-on-year decline of the CPI will likely prove a short-term phenomenon.

With sustained economic recovery, steady market demand expansion, continuous improvement of supply and demand, and gradual elimination of the impact of the high base in the corresponding period of last year, the country's CPI is expected to gradually rise, said Dong.

China's economic growth continues apace despite challenges at home and abroad, and the country is extending support measures to boost confidence, ensure sustained recovery and promote high-quality development.

The country's economy expanded 6.3 percent in the second quarter of the year, accelerating from 4.5 percent in the previous quarter. It grew 5.5 percent in the first half of the year, above the government's target of around 5 percent set for 2023.

A slew of policy pledges, targeting specific sectors ranging from consumption, private economy, and the property market, to the capital market and forex market, have been made public after a key meeting of the top leadership vowed to strengthen counter-cyclical regulation and make more policy options available.

To encourage consumption, which the government said plays a fundamental role in driving economic growth, the National Development and Reform Commission released a 20-point plan last week to spur consumer spending on a wide range of goods and services, including new energy vehicles, home appliances, electronics, catering, and tourism.