China January consumer prices likely to rise modestly

A customer buy fruit at a market in Xuchang, Central China's Henan province, Jan 3, 2017. [Photo/VCG]

BEIJING - China's consumer prices will likely to rise modestly in January as declining fruit and egg costs offset increases in grain prices.

The consumer price index (CPI), a main gauge of inflation, is expected to hit 2.6 percent in January, higher than the 2.1-percent increase in December, according to forecasts by four financial institutions.

Because of the warm weather, vegetable prices remained largely stable last month. Prices of fruits and eggs fell, offsetting the increase in grain prices, said an analyst with the China Securities.

Food prices account for about one third of China's CPI.

Producer Price Index, a measure of inflation at wholesale level, is forecast to fall 0.2 percent month on month in January, as prices of raw materials dipped.

The official purchasing managers' index (PMI) came in at 51.3 in January, 0.1 lower than in December.

Due to downward pressures, China should focus on stabilizing the economy, curbing asset bubbles and guarding against risks this year, said Chen Weidong, a senior analyst with the Bank of China.

Chen also expects the country's monetary policy to be neutral in 2017, ruling the possibility of sharp tightening or loosening.

The National Bureau of Statistics is set to announce January CPI and PPI on Tuesday, along with other economic indicators.