China’s Inflation Rises 0.2% in October — Deflationary Pressures Persist

By CryptoNewsHub Staff | November 9, 2025 – 10:16pm CET

China’s consumer prices showed a modest rebound in October, offering a glimmer of relief for policymakers battling deflationary pressure. According to data released by the National Bureau of Statistics (NBS) on Sunday, the country’s Consumer Price Index (CPI) rose 0.2% year-on-year, ending a two-month decline and slightly exceeding market forecasts.

On a monthly basis, prices also climbed 0.2%, while the Producer Price Index (PPI) — a key measure of factory-gate inflation — fell 2.1% from a year earlier, marking a mild improvement from September’s 2.5% drop.

A Fragile Recovery

The slight rise in CPI signals a tentative stabilization after months of sluggish demand and near-zero inflation. Analysts say the increase reflects “early signs of price normalization” as consumer activity gradually recovers following policy support and seasonal demand.

However, the underlying data still highlight the challenges facing the world’s second-largest economy. Food prices fell 2.9% year-on-year, continuing to drag on overall inflation, while core inflation — which excludes volatile food and energy costs — edged up to 1.2%, its highest level in nearly 20 months.

“The rebound in CPI is modest and fragile,” said one Shanghai-based economist. “While deflation risks have eased slightly, the recovery in domestic demand remains weak and uneven.”

Producers Still Struggling

The PPI’s continued decline underscores weak industrial demand and persistent overcapacity in key sectors, including manufacturing and energy. Although the pace of contraction has slowed, Chinese producers are still under pricing pressure amid slower global demand and excess output.

Economic Implications

While the mild CPI increase is a positive sign, economists caution that China’s economy remains far from escaping deflationary danger. Growth momentum is being held back by weak consumer confidence, a fragile property sector, and limited private investment.

The People’s Bank of China (PBOC) faces a delicate balancing act — supporting growth through monetary easing and targeted stimulus while avoiding asset bubbles and further distortions in the housing market.

“The uptick is welcome, but not enough to declare victory,” analysts at Reuters noted. “Beijing will need stronger demand-side measures — from tax relief to consumer subsidies — if it hopes to lift inflation sustainably.”

What’s Next

Markets will be closely watching November and December data to see if this rebound represents a turning point or a temporary blip. Particular attention will be on any narrowing in the PPI decline, which could indicate improving industrial activity.

For now, China’s inflation outlook remains subdued — caught between weak domestic demand and lingering overcapacity.

Bottom Line:
China’s inflation may have finally turned positive, but the recovery remains fragile. With CPI up just 0.2% and PPI still falling, the world’s second-largest economy continues to walk a fine line between cautious stabilization and renewed deflationary risk.