Consumer inflation in China will hit 5% in January as higher oil prices combined with a low base from 2019 drive up the cost of vehicle fuel, petrochemicals and other by products such as plastic packaging, Yu Xiangrong, a Hong Kong-based Citigroup economist, wrote in a note.

He also said producer prices are more likely to turn positive in the month, as China relies heavily on foreign supplies for oil and more expensive imports pass through to downstream sectors.

Inflation data for December is due for release on Jan 9.

Yet, the surge caused by supply shocks won’t last long since there’s still a possibility that Iran and the US could find common cause in a new agreement, Yu said. The central bank will “keep its easing bias to contain downside risks in 2020”, he said.