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China Inflation Turns Positive as Factory-Gate Deflation Eases in October

Analysts caution that persistent factory deflation plus soft demand point to a fragile recovery.

Overview

  • Consumer prices rose 0.2% year on year in October, topping forecasts for no change after a 0.3% drop in September.
  • Core inflation reached 1.2% year on year, a 20‑month high that points to slightly firmer underlying price pressures.
  • Producer prices fell 2.1% from a year earlier, easing from September’s 2.3% decline and marking a 37th straight month in negative territory.
  • NBS statistician Dong Lijuan said capacity management in key industries helped narrow producer price declines.
  • Policy rates have been kept steady for five months as the economy remains on track for about 5% growth this year, though momentum has cooled.