China Inflation Rate Accelerates as Expected

China’s annual inflation climbed to 0.8% in August 2026 from July’s six-month low of 0.5%, in line with market estimates. Non-food prices rose at a steeper rate (1.2% vs 0.9% in July), led by a sharp increase in transport costs (2.5% vs 0.4%) amid higher fuel prices and stronger travel-related demand. Upward price pressure also came from clothing (1.3% vs 1.4%), healthcare (2.7% vs 2.9%), and education (1.4% vs 1.3%). In contrast, housing costs remained subdued (-0.3% vs -0.3%). On the food side, prices declined for the fifth straight month (-1.4% vs -1.5%), weighed by a further drop in pork prices amid abundant supply and weak consumption. Core inflation, excluding food and energy, rose 1.0% yoy, up from July's six-month low of 0.9% On a monthly basis, consumer prices increased 0.4%, topping forecasts of a 0.3% gain and reversing a 0.1% drop in July. It also marked the highest monthly reading since February.

China’s annual inflation eased to 0.5% in July 2026 from 1.0% in the prior month, falling short of market forecasts of 0.8%. It was the lowest print since January, as food prices continued to decline while non-food inflation slowed further. Food cost fell for the fourth straight month (-1.5% vs -1.6% in June), weighed by a further drop in pork prices amid abundant supply and weak consumption. Meanwhile, non-food prices rose at a softer rate (0.9% vs 1.5%), with transport costs up more modestly (0.4% vs 4.1%) after a government fuel-price cut and easing global energy costs as Middle East supply disruptions subsided. Education costs also eased (1.3% vs 1.4%) while housing cost fell further (-0.3% vs -0.3%). In contrast, clothing inflation was stable (at 1.4%), and healthcare prices accelerated (2.9% vs 2.3%). Core inflation, excluding food and energy, rose 0.9% yoy, after June's 1.0%. Monthly, consumer prices fell 0.1%, defying consensus for a 0.2% gain and following a 0.3% fall in June.

China's annual inflation eased to 1.0% in June 2026 from 1.2% in both April and May, slightly below market expectations of 1.1%, marking the softest increase in three months. Non-food inflation slowed (1.5% vs 1.9% in May) due to a moderation in transport costs (4.1% vs 5.4%), as the government cut domestic retail gasoline and diesel prices in June amid lower energy prices following an easing of the Middle East conflict. Prices also continued to rise for clothing (1.4% vs 1.4%), healthcare (2.3% vs 2.1%), and education (1.4% vs 1.3%). Meanwhile, housing costs declined at a faster pace (-0.3% vs -0.2%). On the food side, prices fell for the third consecutive month (-1.6% vs -1.7%), largely due to persistently weak pork prices and continued declines in fresh fruit prices. Core inflation, excluding food and energy, increased 1.0% yoy, following a 1.1% rise in May. On a monthly basis, consumer prices fell 0.3% after edging down 0.1% in May, compared with market forecasts of a 0.2% decline.