1) The CPI for February 2025 was -0.7%, lower than the previous month's 0.5% and also higher than the expected -0.5%.

Year-on-year, prices for food, tobacco, and alcohol decreased by 1.9%, with fresh vegetable prices dropping by 12.6%, contributing approximately -0.31 percentage points to the CPI decline; fresh fruit prices fell by 1.8%, contributing approximately -0.04 percentage points; while pork prices rose by 4.1%, contributing approximately 0.05 percentage points to the CPI increase.

Alcohol prices in January decreased by 1.9% year-on-year, widening further compared to the previous month's -2.5%.

Non-food prices fell by 0.1% year-on-year, lower than the previous month's 0.5%.

The February CPI turned negative and was below expectations. According to official explanations, there are three main reasons:

a) The Lunar New Year falling in a different month led to a higher base for year-on-year comparison: the lagged impact of last year's price changes was approximately -1.2 percentage points, while the new impact of this year's price changes was about 0.5 percentage points. Excluding the Lunar New Year effect, the February CPI rose by 0.1% year-on-year.

b) Favorable weather in February this year facilitated the growth and transportation of fresh vegetables.

c) Price cuts and promotions for goods such as cars.

Looking at the January-February average, the CPI was -0.1% year-on-year, still at a low level underwater. The recently held important meeting set this year's CPI target at 2.0%, lower than the previous year's 3.0%, reflecting the current situation.

2) The PPI for February was -2.2%, higher than the previous month's -2.3% but lower than the expected -2.1%.

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