China's CPI in May fell by 0.1% year-on-year, turning from an increase to a decrease month-on-month, and the year-on-year decline in PPI expanded to 3.3%

China's CPI in May continued to decline year-on-year, and month-on-month it shifted from an increase to a decrease, mainly influenced by falling energy prices. The year-on-year decline in May's PPI expanded from 2.7% last month to 3.3%, with a month-on-month decrease of 0.4%; this was primarily due to international input factors affecting the prices of related domestic industries and a phase-wise decline in the prices of some domestic energy and raw materials.

On June 9 (Monday), the National Bureau of Statistics released data showing that in May 2025, the national consumer price index (CPI) for residents decreased by 0.1% year-on-year. Among them, urban prices remained stable, while rural prices fell by 0.4%; food prices decreased by 0.4%, and non-food prices remained stable; consumer goods prices fell by 0.5%, while service prices rose by 0.5%. From January to May, the average national consumer price index decreased by 0.1% compared to the same period last year.

In May, the national consumer price index decreased by 0.2% month-on-month. Among them, urban prices fell by 0.2%, and rural prices fell by 0.2%; food prices decreased by 0.2%, and non-food prices decreased by 0.2%; consumer goods prices fell by 0.3%, while service prices remained stable.

In May 2025, the national industrial producer price index (PPI) decreased by 3.3% year-on-year and by 0.4% month-on-month; the industrial producer purchase price index decreased by 3.6% year-on-year and by 0.6% month-on-month. From January to May, the average industrial producer price index and purchase price index both decreased by 2.6% compared to the same period last year.

Dong Lijuan, chief statistician of the Urban Division of the National Bureau of Statistics, interpreted the CPI and PPI data for May 2025 as follows:

The month-on-month decline in CPI is mainly influenced by falling energy prices. Energy prices decreased by 1.7% month-on-month, affecting the CPI's month-on-month decline by about 0.13 percentage points, accounting for nearly 70% of the total decline in CPI. Among them, gasoline prices fell by 3.8%, with the decline expanding by 1.8 percentage points compared to last month.

The year-on-year CPI showed a slight decline, with the decline rate the same as last month. Prices of gold jewelry, household textiles, and durable consumer goods for entertainment rose by 40.1%, 1.9%, and 1.8% respectively, with the increase rates all expanding; prices of fuel vehicles and new energy vehicles fell by 4.2% and 2.8% respectively, with the decline rates narrowing. Service prices rose by 0.5%, with the increase rate expanding by 0.2 percentage points compared to last month. In services, rental fees for vehicles, airplane tickets, and travel prices all shifted from decline to increase, rising by 3.6%, 1.2%, and 0.9% respectively.

The main reasons for the month-on-month decline in PPI this month: first, international input factors affected the price decline in related domestic industries. The decline in international crude oil prices affected the prices in domestic oil-related industries, with prices in the oil and gas extraction industry falling by 5.6%, prices in refined petroleum product manufacturing falling by 3.5%, and prices in the chemical raw materials and chemical products manufacturing industry falling by 1.2% The three industries mentioned above collectively contributed to a month-on-month decrease in PPI of approximately 0.23 percentage points, accounting for more than half of the total decline. Secondly, some domestic energy and raw material prices have shown a phase-down. Coal demand is in the off-season, with sufficient coal stocks at power plants and ports, coupled with low costs of new energy generation and strong substitution effects, leading to a 3.0% decrease in coal mining and washing industry prices, and a 1.1% decrease in coal processing prices.

In addition, due to the high comparison base from the same period last year and other factors, the year-on-year decline in PPI has widened by 0.6 percentage points compared to last month. However, from a marginal change perspective, the implementation of macro policies in our country has strengthened, and the supply-demand relationship in some industries has improved, with prices in certain areas showing a positive trend. Firstly, the continuous growth of new consumption momentum has driven a year-on-year rebound in prices of living materials. Secondly, the development of high-end equipment manufacturing and other industries has driven a year-on-year increase in prices in related industries.

May CPI shifts from increase to decrease month-on-month, with a slight year-on-year decline

Year-on-year, in May, prices of food, tobacco, and alcohol increased by 0.1%, contributing approximately 0.02 percentage points to the rise in CPI (Consumer Price Index). Among food items, fresh fruit prices rose by 5.5%, contributing approximately 0.12 percentage points to the CPI increase; aquatic product prices rose by 2.5%, contributing approximately 0.05 percentage points; livestock meat prices rose by 0.7%, contributing approximately 0.02 percentage points, with pork prices rising by 3.1%, contributing approximately 0.04 percentage points; fresh vegetable prices fell by 8.3%, contributing approximately 0.17 percentage points to the CPI decrease; egg prices fell by 3.5%, contributing approximately 0.02 percentage points; and grain prices fell by 1.4%, contributing approximately 0.02 percentage points to the CPI decrease.

Among the other seven major categories, six saw price increases while one saw a decrease. Specifically, prices for other goods and services, clothing, and education, culture, and entertainment rose by 7.3%, 1.5%, and 0.9%, respectively, while prices for medical care, housing, and daily necessities and services rose by 0.3%, 0.1%, and 0.1%, respectively; transportation and communication prices fell by 4.3%.

Month-on-month, in May, prices for food, tobacco, and alcohol fell by 0.2%, contributing approximately 0.05 percentage points to the CPI decrease. Among food items, fresh vegetable prices fell by 5.9%, contributing approximately 0.12 percentage points to the CPI decrease; egg prices fell by 0.9%, contributing approximately 0.01 percentage points; livestock meat prices fell by 0.2%, contributing approximately 0.01 percentage points, with pork prices falling by 0.7%, contributing approximately 0.01 percentage points; fresh fruit prices rose by 3.3%, contributing approximately 0.07 percentage points to the CPI increase; aquatic product prices rose by 0.8%, contributing approximately 0.02 percentage points.

Among the other seven major categories, four saw price increases, one remained stable, and two saw decreases month-on-month. Specifically, prices for other goods and services and clothing rose by 0.7% and 0.6%, respectively, while prices for education, culture, and entertainment, and medical care both rose by 0.1%; housing prices remained stable; transportation and communication, and daily necessities and services prices fell by 1.2% and 0.8%, respectively

PPI Year-on-Year Decline Expands to 3.3%, Marginal Price Improvement in Some Areas

In May 2025, the national industrial producer price index (PPI) decreased by 3.3% year-on-year and by 0.4% month-on-month; the industrial producer purchase price index decreased by 3.6% year-on-year and by 0.6% month-on-month. From January to May, on average, both the industrial producer price index and purchase price index decreased by 2.6% compared to the same period last year.

Year-on-year, in May, among the industrial producer prices, the price of production materials decreased by 4.0%, contributing approximately 2.98 percentage points to the overall decline in the industrial producer price index. Specifically, the mining industry price decreased by 11.9%, raw materials industry price decreased by 5.4%, and processing industry price decreased by 2.8%. The price of living materials decreased by 1.4%, contributing approximately 0.36 percentage points to the overall decline in the industrial producer price index. Among these, food prices decreased by 1.4%, clothing prices remained stable, general daily necessities prices increased by 0.6%, and durable consumer goods prices decreased by 3.3%.

In the industrial producer purchase prices, fuel and power prices decreased by 9.8%, black metal materials prices decreased by 7.3%, chemical raw materials prices decreased by 5.4%, agricultural and sideline products prices decreased by 2.6%, textile raw materials prices decreased by 2.5%, and construction materials and non-metallic materials prices decreased by 1.1%; prices of non-ferrous metal materials and wires increased by 4.6%.

Month-on-month, in May, among the industrial producer prices, the price of production materials decreased by 0.6%, contributing approximately 0.44 percentage points to the overall decline in the industrial producer price index. Specifically, the mining industry price decreased by 2.5%, raw materials industry price decreased by 0.9%, and processing industry price decreased by 0.3% The prices of living materials remained stable. Among them, food prices decreased by 0.1%, clothing prices increased by 0.2%, and the prices of general daily necessities and durable consumer goods both increased by 0.1%.

In the purchase prices of industrial producers, fuel and power prices decreased by 2.1%, chemical raw material prices decreased by 1.2%, black metal material prices decreased by 0.6%, textile raw material prices decreased by 0.4%, building materials and non-metallic prices decreased by 0.2%, and non-ferrous metal materials and wire prices decreased by 0.1%; the prices of agricultural and sideline products remained stable.