China consumer inflation slows, producer prices hit near 4-year high in June
10 reported
China’s consumer price growth slowed more than expected in June, while wholesale inflation accelerated to its highest level in nearly four years, according to data released Thursday by the National Bureau of Statistics. Consumer prices rose 1% year-over-year, missing economists’ forecast of 1.1% and down from 1.2% in May. Core CPI, excluding food and energy, also rose 1%, edging down from 1.1% in May. Food prices fell 1.6% year-over-year, easing from a 1.7% decline in May. The producer price index jumped 4.1% year-over-year, in line with forecasts and up from 3.9% in May, marking the strongest growth since July 2022, according to LSEG data. On a month-on-month basis, PPI declined 0.3%. Economists attributed the year-on-year PPI strength to a low-base effect, noting that oil prices are on an easing course and that factories cannot fully pass on cost increases to downstream clients due to weak domestic demand.
What’s reported
China’s consumer prices rose 1% in June from a year ago, missing the 1.1% estimate in a Reuters poll and slowing from 1.2% in May.
Core CPI (excluding volatile food and energy) rose 1% in June from a year earlier, down from 1.1% in May.
Food prices declined 1.6% year-over-year in June, easing from a 1.7% fall in May.
The producer price index jumped 4.1% year-over-year in June, in line with forecasts and up from 3.9% in May, the strongest growth since July 2022.
On a month-on-month basis, PPI declined 0.3% in June.
Producer prices recorded their worst decline in almost two years in June last year, falling 3.6% from the prior year.
Producer prices returned to growth in March, helped by the Middle East conflict and rising demand for AI computing power.
China’s manufacturing activity expanded faster than expected in June, driven by external demand including AI-related tech.
The International Monetary Fund on Wednesday raised its 2026 growth forecast for China to 4.6%, up from 4.4%, while trimming global growth to 3%.
China has set a growth target of 4.5%-5% for 2026.
Key figures
Tianchen Xu, senior economist at Economist Intelligence Unit
Neo Wang, China strategist at Evercore ISI
Gabriel Wildau, managing director at Teneo
Sources: CNBC
