China’s producer prices rose 0.5% year-on-year in March 2026, surpassing market expectations of a 0.4% increase and reversing a 0.9% decline in February. This was the first annual rise since September 2022, bringing an end to the country’s longest deflationary spell in decades. The turnaround was largely driven by a sharp increase in global commodity prices, especially energy, as well as improved supply–demand dynamics in several domestic industries.
Prices for production materials rebounded (up 1.0% vs a 0.7% fall in February), led by raw materials (up 1.1% vs down 1.9%) and intermediate goods (up 2.0% vs down 5.3%). Prices of processed goods also accelerated (up 0.9% vs 0.3%). Deflation in consumer goods moderated as well, with prices falling 1.3% year-on-year compared with a 1.6% decline in February. Within this category, price drops eased for food (down 1.7% vs 1.8%), durable goods (down 1.0% vs 1.6%), and daily-use items (down 1.4% vs 1.8%). In contrast, clothing prices continued to edge lower (down 1.1% vs 1.0%).
On a monthly basis, producer prices rose 1.0%, the strongest gain since 2022, after having increased 0.4% in each of the previous two months.
