China: Inflation rises in December from November
Latest reading: Consumer prices rose 0.8% on a year-on-year basis in December, following a 0.7% rise in the prior month. December’s reading was the strongest since February 2023.
Food inflation accelerated sharply, posting its strongest increase in 14 months at 1.1%, up from 0.2% in November. By comparison, non-food inflation was unchanged at 0.8%, supported in part by the continued rollout of consumer trade-in incentives. Offsetting these increases, housing costs declined by 0.2% after previously remaining flat, while transportation prices fell further, deepening to -2.6% from -2.3%. Core inflation remained steady at 1.2% year over year, marking its highest level in 20 months.
Finally, consumer prices increased 0.20% in December on a month-on-month basis, following a 0.10% decline in the prior month.
Panelist insight: ING’s Lynn Song said:
“We’re looking for 0.9% CPI inflation in 2026. While this remains well short of the 2% inflation target pursued by many central banks globally, it would nonetheless be a healthy development after three consecutive years of annual CPI inflation of 0.2% or lower. Despite expectations of a recovery, inflation remains relatively low and should not preclude further monetary easing this year.”