China’s consumer prices have risen for the first time in five months, indicating that government efforts to stimulate the economy are beginning to take effect. In June, the consumer price index (CPI), a key gauge of inflation, increased by 0.1% year-on-year, reversing a decline in May, according to the National Bureau of Statistics (NBS).
On a monthly basis, the CPI fell slightly by 0.1%, but the pace of decline has slowed. Excluding volatile food and energy prices, the core CPI rose by 0.7% year-on-year, marking its highest level in over a year.
“The shift from decline to growth in the CPI has been mainly driven by a rebound in the prices of industrial consumer goods,” said Dong Lijuan, chief statistician at the NBS’s urban division. She noted that the narrowing decline in prices of industrial consumer goods reduced the downward pressure on overall consumer prices.
However, China’s producer price index (PPI), which measures costs for goods at the factory gate, fell by 3.6% year-on-year, deepening from a 3.3% decline in May. This indicates ongoing deflationary pressures in the industrial sector. On a monthly basis, the PPI decreased by 0.4%.
Despite the broader decline in producer prices, some sectors have shown signs of stabilization and recovery. Prices for gasoline and electric vehicles rose by 0.5% and 0.3% month-on-month, respectively, with year-on-year declines narrowing. High-tech industries, including integrated circuit packaging and testing, wearable smart devices, microwave communication equipment, aerospace equipment, and servers, recorded year-on-year price increases.
These figures suggest that while challenges remain, particularly in the industrial sector, China’s economy is showing early signs of recovery. The government’s measures to boost domestic demand and spur consumption appear to be gaining traction, offering hope for sustained economic growth in the coming months.
