2.5% CPI rise is lowest since June 2013: report

China's inflation remained stable in January when the main gauge Consumer Price Index increased by 2.5 percent from a year earlier, unchanged from the December rate that was the lowest since June 2013, the National Bureau of Statistics reported on Friday.

Food prices, which account for about 30 percent of the CPI calculation, rose 3.7 percent year-on-year in January, compared with 4.1 percent in December. The growth of non-food prices in January increased to 1.9 percent from 1.7 percent in December and 1.6 percent in November, the NBS said.

From December to January, food prices rose 2.4 percent, the fastest monthly increase since March 2013, affected by booming consumption during holidays for New Year's Day and Chinese Spring Festival, said Yu Qiumei, a senior economist at the NBS.

Prices of fruit and vegetables jumped more than 10 percent during the first month of the year, while the pork price fell 1 percent.

Lu Zhengwei, chief economist at the Industrial Bank, said that the 2.5 percent CPI was higher than expected, mainly because of rapidly rising food prices.

"But the whole year's consumption in 2014 may remain relatively weaker, suggested by the falling prices of pork and eggs in January. It is likely we will see an obvious downward trend of the CPI after February," Lu said.

The NBS also released the January Producer Price Index on Friday, a gauge to indicate industrial products' out-of-gate prices.

The PPI dropped for the 23rd consecutive month at a rate of 1.6 percent year-on-year, reaching its lowest level in five months, compared with a decline of 1.4 percent in December, the official data showed.

According to NBS economist Yu, industrial factories’ production activities slowed during the holidays in January, which was the main reason the PPI weakened.

Liu Ligang, chief economist in China at the ANZ Bank, said the falling PPI indicated the market’s more sluggish demand for manufactured products. "Manufacturers may have a more cautious attitude on the economic outlook," he said.

"The current weak inflation shows that the Chinese economy may face downside risks," Liu said. "If the government decides to keep its 7.5 percent annual growth target in 2014, it may need to release a series of stimulation policies before June."