China's May CPI Rises 1.2% YoY; Analysts Note Persistently Low Price Levels

(CNA, Reporter Lu Jia-rong, Taipei, 10th) Latest data from China's National Bureau of Statistics shows that China's Consumer Price Index (CPI) increased by 1.2% year-on-year in May. Chinese economists state that the current situation of low domestic price levels has not seen a fundamental change.

Data released today by the National Bureau of Statistics of China shows that in May 2026, China's CPI rose by 1.2% year-on-year, with the growth rate remaining flat with April. The core CPI, which excludes food and energy, rose by 1.1% year-on-year in May, with the growth rate falling by 0.1 percentage points from the previous month.

According to media reports from China Securities Journal and Jiemian News, Feng Lin, Executive Director of the Research and Development Department at Golden Credit Rating, stated that overall, the imported inflationary effect from geopolitical conflicts in the Middle East remained at a high and stable level in May. The core CPI, which better reflects the basic price level by excluding volatile energy and food prices, remained low in May. This indicates that there is still significant room for pro-consumption policies to play a role later.

Feng Lin added that the direction and duration of the geopolitical situation in the Middle East are key to determining international oil price trends, which in turn will be a significant factor affecting domestic CPI. Furthermore, external geopolitical fluctuations will disrupt export, domestic investment, and consumption momentum, thereby affecting the overall price trend.

Feng Lin emphasized, "Under the prospect of a ceasefire being maintained in the Middle East in June, the year-on-year CPI for June is expected to remain around 1.2%; excluding the imported inflationary factor brought by high oil prices, the current situation of low domestic price levels has not yet undergone a fundamental change."

Wen Bin, Chief Economist at China Minsheng Bank, explained that while the low base effect, high oil prices, and seasonal recovery in service consumption will support a modest year-on-year increase, low food prices, especially pork, will continue to be a drag. The CPI is expected to fluctuate within a range below 1.5%.

Wen Bin pointed out that for macroeconomic policy, there is still a need to focus on boosting final demand. Monetary policy is temporarily constrained by prices with limited room for easing, and fiscal policy may play a larger role. For example, by quickly implementing measures to stabilize employment, expand domestic demand, and promote income growth, and using policy tools such as ultra-long-term special treasury bonds and trade-in programs for consumer goods to boost consumption and clear the transmission blockages from the production side to the consumption side. (Editor: Chu Chien-ling) 1150610