Consumer inflation in China eased further to a nine-month low of a mere 0.1% rise on the year in December after slowing to 0.2% in November from 0.3% in October, indicating demand remains sluggish despite the government's drive to lift the economy out of the pandemic slump.

The weakest figure since the 0.1% rise in March 2024 was mainly caused by a 2.2% drop in transportation and communications costs and a 0.7% dip in the prices for living goods and services as well as flat prices of food, tobacco and alcohol, offsetting a 4.9% jump in"other supplies and services" and a 1.2% gain in clothing.

On the month, the consumer price index was unchanged after slumping 0.6% in November, the largest drop in eight months, and falling 0.3% in October. For the whole of 2024, the CPI rose 0.2% from the previous year.

A muted 0.1 percent rise on the year is expected.

Consumer Price Index (CPI) is an index that measures changes over time in the price level of consumer goods and services purchased by residents, which reflects the overall changes in price level.

Consumer prices account for a majority of overall inflation, which is carefully monitored by investors worldwide. Investors worldwide monitor Chinese price changes closely. A pickup in inflation could mean an increase in interest rates is in the offing from the People's Bank of China while an easing could mean looser monetary policy. The monthly CPI is broken down by 8 categories with more detail available on the following day including aggregate information by urban and rural areas and provinces.

The CPI measures the change in the level of prices for a specified basket of goods and services normally purchased by urban and rural residents. Approximately 226 areas throughout the country are covered, including 80 counties and 146 cities. The current CPI is an annually chained Laspeyres price index and has been available since 2001. From 1978 to 2000, the index was compiled using current year weights for most items.