China's inflation rises from 0.7% to 0.8% in December

China's consumer price index (CPI) rose by 0.8% in December from a year earlier, accelerating from November's 0.7% increase, China's National Bureau of Statistics (NBS) said on Friday, Azernews reports via Reuters.

On a monthly basis, consumer prices went up by 0.2%, reversing November's 0.1% decline. The NBS also reported that the producer price index (PPI) dropped 1.9% year over year, showing a slower decline in factory-gate prices.

The readings came in slightly below market expectations.

U.S. President Donald Trump's global trade war has added to persistently soft consumer demand, which has remained a drag on confidence and growth for years amid a prolonged property crisis.

The December consumer price index (CPI) rose 0.8% from the same month in 2024, National Bureau of Statistics (NBS) data showed on Friday, matching expectations in a Reuters poll and perking up from the 0.7% increase in November.

The rise was mainly driven by food prices, especially those of fresh vegetables and beef, which expanded 18.2% and 6.9% respectively, Dong Lijuan, a statistician at NBS, said in a statement. Pre-New Year holiday shopping and supportive policies also helped boost consumer prices, Dong added.

Chinese policymakers have repeatedly pledged to support a rebound in prices with monetary policy and have cracked down on excessive competition. They have also vowed to boost people's income to unleash consumption potential and better align the country's supply and demand.

Yet, the underlying demand impulse in the economy remains weak.

"Despite expectations of a recovery, inflation remains relatively low and should not preclude further monetary easing this year," said Lynn Song, ING's chief economist for Greater China.

Zichun Huang, China economist at Capital Economics, said the elevated headline CPI was not due to the government campaign to curb so-called "involution", adding that overcapacity and deflationary pressures will persist in the coming years in the absence of stronger demand-side measures.