China Inflation Highest In Nearly 3 Years

(RTTNews) - China's inflation accelerated the most in nearly three years in December on higher food prices but the overall rate remained weak, official data revealed on Friday.

Consumer prices increased 0.8 percent year-on-year in December, slightly faster than the 0.7 percent rise in November, the National Bureau of Statistics reported.

This was in line with expectations and reached the strongest since February 2023.

Excluding food and energy prices, core inflation remained unchanged at 1.2 percent in December.

The increase in inflation was driven largely by food prices, which rose 1.1 percent from the last year. At the same time, non-food inflation held steady at 0.8 percent.

On a monthly basis, the consumer price index rebounded 0.2 percent in December, as expected.

Data indicates that China avoided deflation in 2025, ING economist Lynn Song said. Inflation showed signs of bottoming out and should pick up further in 2026, the economist noted.

"Despite expectations of a recovery, inflation remains relatively low and should not preclude further monetary easing this year," the economist added. Song expects that there is a case for further rate reductions this year, with a 10 basis point cut sometime in the second half of 2026.

The bureau also said that producer prices contracted 1.9 percent in December from a year ago, beating forecasts for a decline of 2.0 percent following the 2.2 percent decrease a month earlier. Prices have been falling for 39 consecutive months.