Consumer price growth in China in January was lower than expected, indicating continued weakness in domestic demand and heightening concerns about prolonged deflationary processes in the world's second-largest economy.

According to the National Bureau of Statistics, the consumer price index (CPI) rose 0.2% year-on-year, compared with expectations of 0.4%. For comparison, in December the figure was 0.8%. In monthly terms, prices also rose by 0.2%, which coincided with the December figure but was lower than the forecast of 0.3%.

The producer price index (PPI) fell by 1.4% year-on-year. Although the decline was slightly less severe than the forecast 1.5%, the index has remained in negative territory for the 40th consecutive month. This indicates continued pressure on selling prices amid excess capacity and weak external demand.

Despite a moderate acceleration in inflation at the end of last year, the latest data show that price momentum remains unstable. The continuing decline in producer prices is holding back investment activity and wage growth.

The published figures may increase pressure on the Chinese authorities to expand fiscal and monetary support measures to stimulate consumption and combat deflationary risks.