China's Producer Inflation Eases to 3.5 Percent in July, Lowest in Three Months

China's National Bureau of Statistics (NBS) said on Sunday, 18 Mordad 1405 (August 9, 2026), that the producer price index (PPI) rose 3.5 percent year on year in July, down from 4.1 percent in June and below the 3.8 percent market estimate in a Reuters poll, the lowest producer inflation reading since April. The consumer price index (CPI) also eased, with annual inflation at 0.5 percent, a six month low, as food prices fell 1.5 percent. According to Daily Sabah, the slowdown came as global energy prices retreated somewhat after uncertainty around the Strait of Hormuz eased.

Zhaopeng Xing, ANZ's senior China strategist, said lower oil prices combined with weakening demand pulled both July inflation gauges below expectations. China's leadership, facing a two speed economy of strong factory output and exports but weak domestic demand, has pledged to bolster growth by accelerating fiscal spending on already budgeted infrastructure projects through year end.