China’s consumer inflation slowed more than expected after a pullback in commodity costs with an easing of tensions over Iran last month.
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, matching forecasts. The core CPI, which strips out volatile food and energy prices, dipped to 1% in June, rising at the slowest pace since January.
China probably exited economy-wide deflation last quarter after a three-year stretch, 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.
A revival of prices 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.
