China’s annual inflation jumped to 1.3% in February 2026 from 0.2% in the previous month, marking the highest reading since January 2023 and exceeding market expectations of 0.8%. The increase largely reflected the impact of the Lunar New Year, which fell in mid-February this year and typically boosts holiday-related spending. Food prices logged the sharpest rise since October 2024, rebounding from a prior decline (1.7% vs -0.7% in January). Non-food inflation also accelerated notably (1.3% vs 0.4%), suggesting broader price pressures alongside the seasonal demand surge. On a monthly basis, the CPI climbed 1.0%, quickening from 0.2% in January and pointing to the largest monthly increase since January 2021.