China's CPI Sees Lowest Increase in Three Months

China's CPI Sees Lowest Increase in Three Months

Hiroko Takahashi
1 min read

In June, China's Consumer Price Index (CPI) rose by 0.2%, slightly down from May's 0.3%, marking the lowest increase in three months. Although there was a significant rise in pork prices, the overall decrease in food prices year-on-year contributed to the slowdown in CPI growth. The core CPI, which excludes food and energy prices, remained steady at 0.6%, indicating continued weak demand. Concurrently, the Producer Price Index (PPI) experienced a decline on a monthly basis due to international commodity price fluctuations and domestic demand issues, although the annual decrease narrowed slightly. This data was released by the National Bureau of Statistics on July 10.

Key Takeaways

  • June CPI increased by 0.2% year-on-year, a 0.1 percentage point decrease.
  • Core CPI remained stable at 0.6%, indicating weak overall demand.
  • PPI's annual decline narrowed to 0.8%, with a month-on-month shift from positive to negative.
  • Food prices saw a larger year-on-year decrease, while energy and service price increases slowed.
  • The PPI's annual decline was mitigated by base effects.


The subdued CPI and PPI in China reflect weak domestic demand and external economic pressures. The marginal CPI increase, despite pork price hikes, and the PPI's downturn due to commodity price fluctuations, suggest ongoing economic challenges. Short-term repercussions may include restrained consumer spending and potential market volatility. Long-term implications, if sustained, could necessitate structural economic adjustments and policy interventions to bolster growth. Affected stakeholders include Chinese consumers, the agricultural and energy sectors, and global commodity markets.

Did You Know?

  • Consumer Price Index (CPI):
    • The CPI measures the weighted average of prices of a basket of consumer goods and services and is used to assess changes in the cost of living.
  • Producer Price Index (PPI):
    • The PPI gauges the average change over time in the selling prices received by domestic producers for their output and is an indicator of future inflation and the overall state of the economy.
  • Core CPI:
    • Core CPI excludes food and energy prices to capture underlying inflation trends, as food and energy prices can fluctuate due to factors unrelated to broader economic conditions.

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