Inflation Data Summary - In June, China's CPI turned positive at +0.1% year-on-year, a recovery from -0.1% in May, marking the first positive reading since January 2025[3] - The month-on-month CPI decreased by -0.1%, an improvement from the previous month's decline of -0.2%[3] - Core CPI rose to +0.7% year-on-year in June, up from +0.6% in May, while month-on-month core CPI remained unchanged at 0%[3] PPI Analysis - June's PPI decreased by -3.6% year-on-year, a decline of 0.3 percentage points from the previous month, marking the lowest level since August 2023 and the 33rd consecutive month of negative growth[9] - Month-on-month PPI fell by -0.4%, continuing a trend of negative growth for seven consecutive months, which is weaker than the historical average of -0.1%[9] Key Drivers and Trends - The positive CPI was primarily driven by clothing, household goods, and services, with household goods benefiting from consumption incentives[4] - Food prices decreased by -0.4% month-on-month, with pork prices significantly dropping from +3.1% to -8.5% year-on-year[4] - The international oil price recovery, influenced by geopolitical tensions, supported domestic gasoline prices, which shifted from -3.7% to +0.3% month-on-month[4] Future Outlook - The current inflation rate is still far from the annual target of 2%, indicating a need for further policy support to stabilize domestic demand[12] - The core CPI is expected to remain a key support for prices under existing policies, while industrial product prices may require additional measures to improve[12]