In October, driven by policies to expand domestic demand and the impact of the National Day and Mid-Autumn Festival holidays, the Consumer Price Index (CPI) rose 0.2% month-on-month and 0.2% year-on-year. The core CPI, excluding food and energy prices, increased 1.2% year-on-year, marking the sixth consecutive month of expansion.

Meanwhile, the Producer Price Index (PPI) shifted from flat in September to a 0.1% month-on-month increase in October—the first rise this year—due to improved supply-demand dynamics in certain domestic industries and international commodity price transmission. Year-on-year, PPI fell 2.1%, narrowing by 0.2 percentage points from the previous month, the third consecutive month of contraction easing.

Experts noted that the improvement in price indicators was broad-based and exceeded seasonal trends, reflecting smoother economic circulation and strengthening domestic momentum.

**CPI Turns Positive Year-on-Year** October’s CPI rose 0.2% month-on-month, slightly above seasonal levels. Service prices rebounded from a 0.3% decline in September to a 0.2% increase, 0.2 percentage points higher than seasonal norms. Holiday travel demand boosted prices for hotel stays, airfare, and tourism by 8.6%, 4.5%, and 2.5%, respectively. Food prices rose 0.3%, with vegetables, lamb, fruit, seafood, and beef up 0.5%–4.3%. Energy prices fell 0.4%, while non-energy industrial goods rose 0.3%.

Year-on-year, CPI turned from a 0.3% drop in September to a 0.2% gain. Core CPI (excluding food and energy) climbed 1.2%, the highest since March 2024. Services prices rose 0.8%, up 0.2 percentage points from September. Non-energy industrial goods gained 2.0%, with home appliances, recreational durables, and household items up 2.4%–5.0%, while fuel car price declines narrowed to 2.3%.

Feng Lin, Research Director at Oriental Jincheng, noted that pro-consumption policies, such as trade-in programs, drove industrial goods prices higher. Pang Ming, a senior researcher at the National Finance and Development Laboratory, highlighted that steady core CPI growth signals robust domestic demand, particularly in services.

**PPI Sees First Monthly Rise This Year** PPI edged up 0.1% month-on-month in October, the first increase this year. Dong Lijuan, Chief Statistician at the National Bureau of Statistics, attributed this to: 1. **Supply-demand improvements**: Coal mining, processing, and photovoltaic equipment prices rose for over two months, while cement, computers, lithium batteries, and semiconductors shifted from declines to gains. 2. **Global commodity trends**: Rising international metal prices lifted domestic nonferrous mining by 5.3%, but falling oil prices dragged petroleum and gas extraction down 2.3%.

Year-on-year, PPI’s 2.1% drop narrowed for the third straight month. Key sectors saw smaller declines: coal mining (-1.2pp), photovoltaics (-1.4pp), batteries (-1.3pp), and autos (-0.7pp). Modern industrial upgrades and consumption recovery drove gains in nonferrous metals (6.8%), electronic materials (2.3%), and microwave equipment (1.8%). Consumer-focused sectors like crafts (18.4%), sports equipment (3.3%), and nutrition foods (2.1%) also rose.

**Outlook: Moderate Price Recovery Ahead** Pang Ming stated that the price rebound reflects policy effectiveness and balanced supply-demand, signaling broad economic improvement. Over the next 3–6 months, supportive policies, recovering confidence, and demand expansion may lift prices moderately, though external uncertainties and domestic demand consolidation require monitoring.

Feng Lin noted subdued inflation leaves room for monetary and fiscal stimulus in Q4. Wen Bin, Chief Economist at China Minsheng Bank, expects CPI to recover gently, with “food strong, energy weak, core stable,” while PPI declines narrow further. Industrial upgrades and anti-overcapacity measures will support prices, though real estate adjustments continue to weigh on construction materials and metals.