China's consumer price index (CPI) rose just 1.0% year-on-year in June, edging lower as cooling energy and commodity prices dampened headline inflation.
The official data, released Wednesday, indicates that domestic demand remains subdued, with deflationary pressures in the services sector offsetting modest gains in food prices.
This reading aligns with market expectations for a gradual normalization of inflation rather than a sharp rebound.
The producer price index (PPI) climbed to its highest level since early 2024, signaling some recovery in industrial margins.
However, the modest pace of increase suggests that upstream cost pressures are not yet translating into broad-based consumer price hikes.
The divergence between CPI and PPI highlights the structural challenges in China's economy, where weak household spending continues to limit the pass-through of higher production costs.