China Inflation Rate Slightly Below Estimates

China's annual inflation rate for September 2026 came in at 0.9%, slightly lower than the 0.8% it was in August. This figure fell short of market predictions, which had anticipated a rate of 1%. The September reading was the highest inflation rate since June, with non-food prices accelerating to 1.5% from 1.2% in the previous month.

The surge in non-food inflation was primarily fueled by a notable rise in transport costs, which jumped to 4.3% from 2.5%, partly due to higher fuel prices and increased travel demand in the lead-up to the Golden Week holidays. Other factors contributing to upward price pressure included clothing (1.2% vs 1.3%), healthcare (2.7% vs 2.7%), and education (1.4% vs 1.4%).

On the other hand, housing costs remained relatively stable, with a modest decline of 0.3% compared to the previous month. In contrast, the food sector experienced a decline for the sixth consecutive month, dropping 1.7% in September compared to -1.4% in August. This drop in food prices was mainly attributed to a further reduction in pork prices, as abundant supplies and weak consumer demand continued to weigh on prices.

On a monthly basis, China's consumer prices rose by 0.2%, slightly below forecasts of 0.3%. This growth rate was also slower than the 0.4% increase observed in August, which had been the strongest monthly gain since February.