China’s consumer inflation returned to positive territory in June for the first time in five months, with headline CPI rising 0.1% yoy, above expectations of -0.1% yoy. The improvement was driven by a 0.7% annual rise in core CPI — the strongest core reading since April 2024. The data suggests a modest pickup in domestic demand, although the pace remains fragile as headline inflation is barely above zero.
On the producer side, deflation deepened. PPI fell -3.6% yoy, marking its sharpest drop since July 2023 and extending a nearly three-year deflationary streak. The continued subdued industrial demand reflects the challenges facing China’s manufacturing sector.
