Inflation Data Summary - In September 2025, the CPI year-on-year decreased by 0.3%, slightly better than the previous value of -0.4%[3] - The PPI year-on-year decreased by 2.3%, an improvement from the previous -2.9%[3] - The CPI month-on-month increased by 0.1%, compared to 0.0% in the previous month[3] Key Influences on CPI and PPI - Tail effects continue to significantly impact both CPI and PPI, with a notable reduction expected after October[3] - The decline in pork prices has heavily influenced CPI, with pork prices down 17.0% year-on-year, marking the lowest since January 2024[3] - Non-food prices have shown a recovery, with a year-on-year increase of 0.7% in September, up from 0.5% in the previous month[3] Seasonal Trends and Price Movements - September's CPI month-on-month growth of 0.1% is below the five-year average of 0.14%[3] - Food prices increased by 0.7% month-on-month, exceeding the five-year average of 0.54%, while non-food prices decreased by 0.1%[3] - The average wholesale price of pork fell by 2.4% month-on-month, reaching the lowest level since July 2023[3] Future Outlook - The impact of tail effects on CPI and PPI is expected to lessen in the fourth quarter, particularly in November and December[3] - The implementation of capacity control measures in the pork industry is crucial for stabilizing prices moving forward[3] - The introduction of new financial tools worth 500 billion yuan is anticipated to enhance physical workload in the fourth quarter[3] Risks and Considerations - Potential risks include slower-than-expected domestic policy implementation and unexpected declines in real estate investment[3]

Group 1: CPI Analysis - In July 2025, the CPI increased by 0.4% month-on-month and remained flat year-on-year at 0.0% due to significant pressure from food prices[2] - Core CPI, excluding food and energy, rose to 0.8%, the highest in 17 months, indicating effective domestic demand policies[2] - Vegetable prices saw a significant decline due to high base effects from the previous year, while pork prices continued to drop due to weak terminal demand[2] Group 2: PPI Analysis - In July 2025, the PPI decreased by 3.6% year-on-year and by 0.2% month-on-month, marking a continued decline in the mining and raw material processing industries[2] - The coal mining and oil extraction sectors were the largest contributors to the PPI decline, with mining industries showing a year-on-year drop of 14.0%[2] - The report anticipates a slight recovery in PPI in August, projecting a year-on-year rate around -3%, influenced by high base effects from the previous year[2] Group 3: Future Outlook - The report suggests that while CPI may rise above 0 in August, energy prices remain a significant constraint on overall inflation recovery[2] - The ongoing weak demand in the mid and downstream sectors is expected to limit the positive impact of anti-involution policies on PPI[2] - The effectiveness of domestic policies in stimulating demand will be crucial for any significant recovery in PPI throughout the year[2]