China’s June CPI slows to 1% as PPI hits four‑year high

China’s National Bureau of Statistics reported that the consumer price index (CPI) rose 1 % year‑on‑year in June, down from 1.2 % in May and below the 1.1 % forecast of analysts. Core CPI, which excludes food and energy, also registered a 1 % increase. By contrast, the producer price index (PPI) climbed 4.1 % year‑on‑year, the strongest rise since July 2022, although it fell 0.3 % on a month‑on‑month basis. The surge in producer prices was driven by higher costs for energy, raw materials and equipment tied to AI‑related demand, as well as ongoing geopolitical tensions in the Middle East. Domestic demand remains weak, with households hesitant to spend amid a prolonged property downturn, limiting manufacturers’ ability to pass higher costs onto consumers. The data underscore a “two‑speed” Chinese economy: robust industrial output and export growth alongside sluggish consumption. The International Monetary Fund has revised its 2026 growth forecast for China to 4.6 % as the economy relies increasingly on high‑tech exports while domestic stimulus remains limited.