China on Tuesday reported lower than expected consumer inflation in January, but pressure remains for the Government to control prices, with an ongoing drought and credit expansion complicating the situation.
The consumer price index (CPI), the main gauge of inflation, rose 4.9 per cent year on year in January due to surging food prices, the National Bureau of Statistics (NBS) announced on Tuesday.
The figure was 0.3 percentage points higher than December's, and 0.2 percentage points lower than the 28-month high in November.
Although the figure was lower than market expectations of above 5 per cent, inflation remains a challenge complicated by a winter drought in the Country's north, migrant worker wage increases and global commodity price hikes.
The stock market reacted quietly to the data with the benchmark Shanghai Composite Index on the Shanghai Stock Exchange up 0.1 point from the previous close to 2,899.24 points.
Food Cost Soar
"The extremely cold weather and the Spring Festival holiday spending pushed prices up one per cent from a month ago," said a question and answer statement on the bureau's website.
The producer price index (PPI), the main gauge of inflation at the wholesale level, rose 6.6 per cent in January year on year.
Food prices, which accounted for a third of the basket of goods in China's CPI calculation, in the past, surged 10.3 per cent year on year.