The consumer-price index decelerated to 1% in June from a year earlier, compared with a gain of 1.2% in the previous month, according to data released by the National Bureau of Statistics on Thursday. The median estimate in a Bloomberg survey of economists was 1.1%.
Producer inflation accelerated slightly to 4.1% from a year ago, matching forecasts. On a month-on-month basis, factory prices declined 0.3% from May, their first drop since July 2025.
“The fall in global crude oil prices led to a drop in prices for related sectors in China,” Dong Lijuan, a statistician with the NBS, said in a statement accompanying the release.
The yield on China’s 10-year government bonds was steady at 1.73% after the data publication. The onshore yuan edged up 0.1% against the dollar, making it the best-performing currency in Asia on Thursday.
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Chinese bonds and the yuan have been relatively stable in recent weeks, as markets elsewhere came under pressure from a stronger dollar and increasing bets that the US Federal Reserve would hike interest rates.
China probably exited economy-wide deflation last quarter after three years, in a turnaround caused in large part by booming investment in artificial intelligence and the oil shock stemming from the conflict in the Middle East.
But despite a rally in global oil, chip and metal prices, a broader reflation remains in doubt, as factories struggle to fully pass on higher costs to consumers because of sluggish consumer spending, putting their profitability under pressure.
The core CPI, which strips out volatile food and energy prices, dipped to 1% in June, rising at the slowest pace since January.
A revival of price pressures in the world’s biggest manufacturing nation risks inflationary spillovers around the world. China’s export prices are already surging at the fastest pace since early 2023 in a reversal from years of almost unbroken contraction.