Consumer Prices Well Anchored
China's consumer inflation remained benign in June 2026. The CPI rose 1.0% year-on-year and fell 0.3% month-on-month, with core CPI (excluding food and energy) also at +1.0% — leaving ample room for monetary and fiscal support without overheating concerns.
Food vs Non-Food Split
- Food: -1.2% YoY, dragging the headline lower
- Non-food: +1.4% YoY, led by services and travel
- Gold: +28.1% YoY — a standout on safe-haven demand
- Gasoline: +17.0% YoY
Factory-Gate Prices Turn Positive
The PPI rose 4.1% year-on-year in June (down 0.3% MoM), swinging into clear expansion after a long stretch of deflation. The rebound reflects firmer commodity prices and a gradual normalisation of industrial profitability.
Policy Implications
With CPI contained near 1% and PPI recovering, the policy mix can stay accommodative: the People's Bank of China retains space to guide rates lower, while targeted fiscal spending can sustain the demand recovery without stoking inflation.