China’s annual inflation rate eased to 1.0% in June 2026, down from 1.2% in both April and May and slightly below market expectations of 1.1%. This marked the weakest price increase in three months.
Non-food inflation slowed to 1.5% from 1.9% in May, largely reflecting moderating transport costs (4.1% vs 5.4%) as energy prices fell in June following an easing of tensions in the Middle East. At the same time, prices continued to rise for clothing (1.4%, unchanged from May), healthcare (2.3% vs 2.1%), and education (1.4% vs 1.3%). Housing costs declined at a faster rate, slipping 0.3% after a 0.2% drop in May.
On the food side, prices fell for a third straight month (-1.6% vs -1.7% in May), driven mainly by persistently weak pork prices and ongoing declines in fresh fruit prices. Core inflation, which excludes food and energy, rose 1.0% year-on-year, following a 1.1% increase in May.
On a monthly basis, consumer prices fell 0.3% in June, after a 0.1% dip in May, compared with market forecasts of a 0.2% decline.
