China Inflation Flat in July as Producer Prices Drop Sharply
China’s consumer price index (CPI) remained flat in July, while producer prices (PPI) fell more than expected, reflecting weak domestic demand and ongoing tariff risks.
CPI Holds Steady Year-on-Year
Government data released Saturday showed CPI unchanged year-on-year in July, compared with expectations for a 0.1% increase. This follows a 0.1% rise in June.
On a monthly basis, CPI climbed 0.4%, beating forecasts for a 0.3% gain.
The National Bureau of Statistics said the muted annual reading was driven by lower food prices and a high comparison base from last year, underscoring persistent demand weakness in the economy.
PPI Declines for 34th Consecutive Month
At the factory gate, PPI fell 3.6% year-on-year in July — matching June’s near two-year low and exceeding economists’ expectations of a 3.3% drop.
This marks the 34th straight month of producer price deflation and the weakest level since July 2023.
Global and Domestic Pressures Persist
Extreme weather, slowing global trade, and sector-specific weakness — particularly in construction and exports — have weighed on prices.
Government efforts to cut overcapacity and curb unfair competition have so far done little to lift producer prices.
