China’s inflation data for September, released over the weekend, showed continuously weak price momentum.
Headline CPI growth slowed to 0.4% yoy, down from 0.6% yoy in August and missing market expectations of 0.6%. Core CPI, which excludes volatile food and energy prices, rose by just 0.1% yoy, its lowest reading since February 2021. This marked the 20th consecutive month in which core inflation remained below 1.0%, underscoring persistent weak domestic demand and the need for stronger economic stimulus to encourage consumer spending.
Food prices remained a key driver of inflation, with a 3.3% yoy increase. Vegetable prices surged by 22.9% yoy, and pork prices jumped by 16.2% yoy. These spikes in food costs contributed to the overall rise in consumer prices, but price weakness in other areas remains a concern. For instance, prices of new energy vehicles, which face international tariff pressures, fell by -6.9% yoy.
On the industrial front, PPI fell by -2.8% yoy in September, deeper than the -1.8% yoy decline in August and missing expectations of a -2.5% yoy drop. This marked the 24th consecutive month of negative PPI readings
