Consumer inflation eases in China while producer prices rocket
By Abigail Townsend
Date: Thursday 09 Jul 2026
(Sharecast News) - Consumer inflation slowed slightly in China last month, official data showed on Thursday, narrowly missing expectations, while producer prices hit a near four-year high.
According to the National Bureau of Statistics of China, the consumer price index eased to 1.0% in June, compared to 1.2% in both May and April. Economists had been expecting 1.1%. Month-on-month, CPI edged down 0.3%, compounding May's 0.1% softening.
The slowdown was primarily driven by non-food inflation, which fell 0.4 percentage points. Transportation fuel inflation was down especially sharply, falling to 15.3% from 21.1% in May. Food prices rose by just 0.1 percentage points to remain firmly in deflation, at -1.6%.
Core CPI, which excludes more volatile food and energy costs, rose 1.0%, the slowest pace since January.
However, in contrast the producer price index - which was also released by the NBS - rose to 4.1%, the highest rate since July 2022. Up on May's 3.9%, it was the fourth consecutive monthly rise.
China is facing ongoing softness in domestic demand, weighed down by the lengthy property downturn, lacklustre investment and weak household spending. At the same time, surging export demand for tech and artificial intelligence in particular has boosted high-end manufacturing.
Lynn Song, chief economist, Greater China, at ING, said: "Barring a much larger-than-expected re-escalation of tensions in the Middle East, the worst-case scenario for inflation looks unlikely to play out. While many central bankers have been weighing the necessity to contain inflation, China's price environment remains quite under control. The data is moving from near-deflation to low positive inflation."
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