China inflation hits highest rate since 2023, but deflation woes persist

9th Jan 2026 07:20

(Sharecast News) - Chinese inflation rose at its quickest the pace in almost three years, driven by higher food prices, but weak factory gate deflation remained, highlighting weak underlying demand.

The consumer-price index rose 0.8% year on year, in line with forecasts and the biggest rise since February 2023. However, 2025 CPI was zero, and well below the official target of 2%, according to data published by the National Bureau of Statistics.

Inflation was driven by an increase in fresh vegetable prices, up 18.2% from a year earlier due to supply shortages during the cold winter. Pork prices fell 14.6%.

Core inflation, which excludes volatile food and energy prices, rose 1.2% year on year - unchanged from November.

Producer prices fell 1.9% year on year, better than forecasts of a 2% decline, and extending the deflationary streak beyond three years. The fall also compared with a 2.2% decrease in November.

Reporting by Frank Prenesti for Sharecast.com