Chinese inflation rates pick up as energy costs rise

(Sharecast News) - Both wholesale and consumer price inflation in China accelerated in August, data from the country's National Bureau of Statistics showed on Wednesday, driven by rising energy costs. The producer price index rose to a year-on-year rate of 3.8% last month, up from 3.5% in July and ahead of the 3.7% consensus forecast.

Production materials cost 5.0% more than they did in August 2025, with inflation picking up from 4.8% in July. Consumer goods deflation eased to -0.5% from -0.8%, while durable goods inflation rose to 1.2% from 0.4%.

PPI inflation in China had risen to a four-year high of 4.1% in June, after turning positive in March, ending its longest period of wholesale deflation in decades that had lasted since September 2022.

Meanwhile, the consumer price index also rose at a sharper rate, picking up to 0.8% year-on-year in August from 0.5% the month before, though this was widely expected by economists.

Non-food inflation picked up to 1.2% from 0.9%, with transport costs surging 2.5% after a 0.4% gain previously on the back of higher fuel prices and increased demand.

Food deflation, however continued for the fifth consecutive month, with prices falling 1.4% after a 1.5% decline previously.

Core CPI inflation, which excludes the more volatile food and energy items, accelerated to 1.0% from 0.9%.