China’s consumer inflation increased slightly in November, although it remained weak due to limited economic momentum. At the same time, industrial pressures persisted, with producer prices falling for the 38th month in a row.
Government data released on Wednesday showed that the consumer price index (CPI) rose 0.7% year-on-year. This result met expectations, accelerated from October’s 0.2% increase, and marked the strongest CPI reading since August 2024.
However, CPI still fell 0.1% on a monthly basis, missing forecasts for a 0.3% rise.
The annual improvement was driven partly by holiday-related spending and November’s shopping events, including the major Singles Day promotions. A weaker comparison base from last year also played a role in lifting the number.
According to ING analysts, the CPI uptick was mainly due to higher food prices. They added that further small increases could keep full-year inflation slightly positive.
Even so, this trend is not expected to prevent Beijing from easing monetary policy or expanding fiscal support. ING noted that officials are likely aiming to position 2026—the first year of China’s new five-year plan—on a strong footing.
Consumer confidence received some support after Beijing reaffirmed its commitment to more fiscal stimulus during the recent Politburo meeting. Yet many households remain cautious because of the slowing economy and renewed concerns about the real estate sector in November.
Factory-gate inflation offered little reassurance. The producer price index (PPI) fell 2.2% in November, a deeper decline than the expected 2.0% drop. This marked the 38th straight month of contraction, signaling continued weakness across China’s manufacturing industry.
Producers have been hurt by soft domestic demand, years of elevated output, and ongoing trade-related pressures that weighed on exports in 2025.
Analysts at Capital Economics warned that China’s industrial overcapacity will likely persist in the coming years, keeping the country in a deflationary environment through 2025 and into 2027.
