Inflation data from China for October 2025, Consumer Price Index (CPI) and Producer Price Index (PPI).
CPI +0.2% y/y
- expected 0.0%, prior -0.3%
CPI +0.2% also for the m/m
- prior +0.1%
PPI -2.1% y/y (producer prices have now fallen for a 37th straight month)
- expected -2.2%, prior -2.3%
This is slightly better than expected. The CPI is still flirting with deflation but has come in a touch stronger than expected. The PPI is still locked into deflation but there has been a small improvement. Its still going to be a long path back out of deflation for producer prices though.
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Some background to this if you need it.
Deflation in China has persisted since the pandemic, worsened by
- a property slump,
- weak consumer confidence,
- industrial overcapacity that has pushed companies into price wars
- and, of course, tariff headwinds this year impacting demand also
Despite policy efforts to curb excess competition and stabilise prices, China’s GDP deflator—the broadest gauge of economy-wide prices—has been negative for more than two years, the longest such run since records began in 1992.
Beijing has lowered its official 2025 inflation target to around 2%, the lowest in over two decades. Inflation, however, remains near zero, reflecting deep structural imbalances
