China's July CPI remained flat year-on-year, with the core CPI rising to the highest level since March 2024, and the PPI's month-on-month decline narrowing

In July, the effects of the expansionary domestic demand policy continued to manifest, with the Consumer Price Index (CPI) rising 0.4% month-on-month, reversing a 0.1% decline from the previous month, and remaining flat year-on-year. The core CPI, excluding food and energy prices, increased by 0.8% year-on-year, with the growth rate expanding for three consecutive months.

Affected by seasonal factors and uncertainties in the international trade environment, the Producer Price Index (PPI) decreased by 0.2% month-on-month. The competitive order in the domestic market continued to optimize, with the month-on-month decline narrowing by 0.2 percentage points compared to the previous month, and a year-on-year decline of 3.6%, the same as last month.

On August 9, the National Bureau of Statistics released data showing:

• China's July CPI year-on-year 0%, previous value 0.1%.

• China's July PPI year-on-year -3.6%, previous value -3.6%.

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

The effects of the expansionary domestic demand policy continue to manifest, with prices in the consumption sector showing positive changes. First, the CPI rose 0.4% month-on-month, exceeding the seasonal level by 0.1 percentage points. The month-on-month increase was mainly driven by rising prices for services and industrial consumer goods. Service prices rose 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase, accounting for more than 60% of the total CPI increase.

Second, the core CPI continues to rebound year-on-year. The core CPI, excluding food and energy prices, increased by 0.8% year-on-year, with the growth rate continuing to expand by 0.1 percentage points compared to the previous month, the highest since March 2024. Among them, the prices of gold and platinum jewelry rose by 37.1% and 27.3% year-on-year, respectively, contributing approximately 0.22 percentage points to the year-on-year CPI increase; service prices rose 0.5% year-on-year, maintaining stable growth, contributing approximately 0.19 percentage points to the CPI increase; the prices of fuel vehicles and new energy vehicles decreased by 2.6% and 1.9% year-on-year, respectively, with the declines being the smallest in nearly 34 months and 28 months.

The main reasons for the month-on-month changes in the PPI this month: First, seasonal factors combined with uncertainties in the international trade environment led to price declines in certain industries. The increase in high temperatures and rainy weather during the summer has slowed the construction progress of building projects, affecting the demand for building materials; on the other hand, in some regions, the river water flow is abundant, significantly enhancing the supplementary role of hydropower to thermal power, reducing the demand for thermal coal and lowering electricity prices

Second, the continuous optimization of the competitive order in the domestic market has led to a narrowing of price declines in related industries. The construction of a unified national market is advancing in depth, and the competitive order in industries such as coal, steel, photovoltaics, cement, and lithium batteries continues to optimize. The month-on-month price declines in coal mining and washing, black metal smelting and rolling processing, photovoltaic equipment and components manufacturing, cement manufacturing, and lithium-ion battery manufacturing have narrowed by 1.9, 1.5, 0.8, 0.3, and 0.1 percentage points respectively compared to last month, resulting in a total month-on-month downward impact on the Producer Price Index (PPI) that is 0.14 percentage points less than last month.

In July 2025, the year-on-year consumer price index for residents remained unchanged

In July 2025, the national consumer price index for residents remained unchanged year-on-year. Among them, urban prices remained unchanged, while rural prices decreased by 0.3%; food prices decreased by 1.6%, and non-food prices increased by 0.3%; consumer goods prices decreased by 0.4%, and service prices increased by 0.5%. From January to July, the average national consumer price index decreased by 0.1% compared to the same period last year.

In July, the national consumer price index increased by 0.4% month-on-month. Among them, urban prices increased by 0.4%, and rural prices increased by 0.3%; food prices decreased by 0.2%, and non-food prices increased by 0.5%; consumer goods prices increased by 0.2%, and service prices increased by 0.6%.

1. Year-on-year price changes for various goods and services

In July, the prices of food, tobacco, and alcohol decreased by 0.8% year-on-year, impacting the Consumer Price Index (CPI) by approximately 0.21 percentage points. Among food items, egg prices decreased by 11.2%, impacting the CPI by approximately 0.07 percentage points; fresh vegetable prices decreased by 7.6%, impacting the CPI by approximately 0.16 percentage points; meat prices decreased by 4.6%, impacting the CPI by approximately 0.14 percentage points, with pork prices decreasing by 9.5%, impacting the CPI by approximately 0.13 percentage points; grain prices decreased by 1.0%, impacting the CPI by approximately 0.02 percentage points; aquatic product prices increased by 3.4%, impacting the CPI by approximately 0.07 percentage points; fresh fruit prices increased by 2.8%, impacting the CPI by approximately 0.06 percentage points.

The prices of the other seven major categories showed six increases and one decrease year-on-year. Among them, the prices of other goods and services, clothing, and daily necessities increased by 8.0%, 1.7%, and 1.2% respectively, while education, culture, and entertainment, healthcare, and housing prices increased by 0.9%, 0.5%, and 0.1% respectively; transportation and communication prices decreased by 3.1%.

2. Month-on-month price changes for various goods and services

In July, the prices of food, tobacco, and alcohol decreased by 0.1% month-on-month, impacting the CPI by approximately 0.04 percentage points. Among food items, fresh fruit prices decreased by 3.4%, impacting the CPI by approximately 0.07 percentage points; fresh vegetable prices increased by 1.3%, impacting the CPI by approximately 0.03 percentage points; meat prices increased by 0.4%, impacting the CPI by approximately 0.01 percentage points, with pork prices increasing by 0.9%, impacting the CPI by approximately 0.01 percentage points; The price of aquatic products rose by 0.4%, affecting the CPI increase by approximately 0.01 percentage points.

Among the other seven major categories, six prices rose and one fell. Specifically, transportation and communication, education, culture and entertainment, and other goods and services prices rose by 1.5%, 1.3%, and 0.9%, respectively, while prices for daily necessities and services, medical care, and housing rose by 0.8%, 0.2%, and 0.1%, respectively; clothing prices decreased by 0.3%.

July 2025 Industrial Producer Price Index: Month-on-Month Decline Narrows

In July 2025, the national industrial producer price index decreased by 0.2% month-on-month, and the industrial producer purchase price index decreased by 0.3% month-on-month, with the decline narrowing by 0.2 and 0.4 percentage points compared to the previous month, respectively. Year-on-year, the industrial producer price index decreased by 3.6%, and the industrial producer purchase price index decreased by 4.5%. On average from January to July, the industrial producer price index decreased by 2.9% compared to the same period last year, while the industrial producer purchase price index decreased by 3.2%.

I. Year-on-Year Changes in Industrial Producer Prices

In July, among the industrial producer prices, the price of production materials decreased by 4.3%, affecting the overall level of industrial producer prices by approximately 3.20 percentage points. Among them, the mining industry price decreased by 14.0%, raw materials industry price decreased by 5.4%, and processing industry price decreased by 3.1%. The price of living materials decreased by 1.6%, affecting the overall level of industrial producer prices by approximately 0.42 percentage points. Among them, food prices decreased by 1.8%, clothing prices decreased by 0.1%, general daily necessities prices increased by 0.6%, and durable consumer goods prices decreased by 3.5%.

In the industrial producer purchase prices, fuel and power prices decreased by 10.8%, black metal material prices decreased by 8.0%, chemical raw material prices decreased by 6.5%, agricultural and sideline product prices decreased by 4.6%, construction materials and non-metallic prices decreased by 3.8%, and textile raw material prices decreased by 2.5%; non-ferrous metal materials and wire prices increased by 2.8%.

II. Month-on-Month Changes in Industrial Producer Prices

In July, among the industrial producer prices, the price of production materials decreased by 0.2%, affecting the overall level of industrial producer prices by approximately 0.17 percentage points. Among them, the mining industry price decreased by 0.2%, raw materials industry price decreased by 0.1%, and processing industry price decreased by 0.3%. The price of living materials decreased by 0.2%, affecting the overall level of industrial producer prices by approximately 0.06 percentage points Among them, food prices remained stable, clothing prices decreased by 0.1%, general daily necessities prices decreased by 0.2%, and durable consumer goods prices decreased by 0.6%.

In the purchase prices of industrial producers, the prices of building materials and non-metallic materials decreased by 1.4%, the prices of ferrous metal materials decreased by 0.7%, the prices of fuel and power decreased by 0.6%, the prices of chemical raw materials decreased by 0.5%, and the prices of textile raw materials decreased by 0.1%; the prices of agricultural and sideline products remained stable; the prices of non-ferrous metal materials and wires increased by 0.7%.

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