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China’s CPI recorded positive growth for the seventh consecutive month, rising by 0.6% year-on-year in August, up from 0.5% in the previous month, as reported by the National Bureau of Statistics on September 9. However, the CPI is still below market expectations of 0.7%.
This rise was mainly driven by continuous increases in food prices driven by high temperatures and heavy rainfall, which surged by 2.8% (previously 0%), contributing 0.51 percentage points to the overall CPI growth.
However, non-food prices fell from 0.7% in July to 0.4%, and core CPI, which excludes food and energy, rose by only 0.3%, down from 0.4% in the prior month. August’s PPI reflected similar trends, with China’s PPI declining by 1.8% year-on-year, widening from a 0.8% drop in July. This marks the 23rd consecutive month of contraction, highlighting weak domestic demand and increasing deflationary risks.
