
Lunar New Year lifts China's inflation to a 3-year high as factory deflation persists
China's February consumer prices rose 1.3% year-on-year—the highest in 37 months—driven by Lunar New Year holiday demand for services, travel, and items like flights and jewelry, while producer prices fell 0.9% y/y, the mildest since mid-2024, signaling ongoing weak demand. Analysts caution that an energy shock from Middle East tensions could push inflation higher briefly, but a supply-demand rebound and policy easing may temper the impulse as authorities seek to rebalance the economy.












