Deflation Trend in China: Consumer and Producer Prices on the Decline

Deflation Trend Continues in China

In China, the stagnation in consumer prices and producer prices has persisted, with data from October 2025 indicating ongoing trends. Figures released by the National Bureau of Statistics of China show that the deflation trend in the economy is continuing.

Stagnation in Consumer Prices

On a year-on-year basis, the Consumer Price Index (CPI) increased by 0.2% in October, while core inflation (excluding food and energy) rose by 1.2%. Prices of consumer goods declined by 0.2%, service prices increased by 0.8%, and food prices fell by 2.9%.

With these developments, the CPI has remained below 1% since March 2023, and reducing the annual inflation target for this year to 2% is among the priorities of the Chinese government. The mere 0.2% increase in CPI for the years 2023 and 2024 clearly reflects the situation in the economy.

Ongoing Decline in Producer Prices

China's Producer Price Index (PPI) continues its ongoing decline that has persisted since October 2022. In October, a year-on-year decrease of 2.1% was recorded. The PPI has shown a continuous downward trend throughout this year, with a decline of 3% in 2023 and a decrease of 2.2% in 2024.

The weakness in domestic demand, the debt burden of local governments, and the stagnation in the real estate sector, along with the United States' tariff policies, are adversely affecting the Chinese economy. In a period of high global inflation, China’s counter-trend is notable.