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China’s Inflation Ticks Up as Factory-Gate Deflation Eases in October

The latest reading offers only tentative relief as weak demand keeps deflation pressures in place.

Overview

  • NBS data show consumer prices rose 0.2% year on year in October, beating forecasts for no change after a 0.3% decline in September.
  • Core CPI reached 1.2% year on year, the highest in about 20 months, and headline CPI also increased 0.2% from the prior month.
  • Producer prices fell 2.1% year on year, marking a 37th straight monthly decline but improving from September’s 2.3% drop.
  • NBS cited capacity management and efforts to curb excessive competition as factors narrowing producer-price declines in several industries.
  • Economists said the rebound likely reflects temporary drivers such as holiday demand and warned it is too early to declare deflation risks resolved.