On January 9, data released by the National Bureau of Statistics showed that in December 2025, the Consumer Price Index (CPI) increased by 0.2% month-on-month and rose by 0.8% year-on-year. The core CPI, which excludes food and energy prices, increased by 1.2% year-on-year, marking the fourth consecutive month its growth rate has remained above 1%. The Producer Price Index (PPI) increased by 0.2% month-on-month but decreased by 1.9% year-on-year.
If the more volatile items like food and energy are stripped out, focusing solely on the core CPI which better reflects the economy's underlying demand, it increased by 1.2% year-on-year in December. Furthermore, this growth rate has firmly stayed above 1% for four consecutive months. The moderate rise in prices serves as a reminder that the economy's temperature is undergoing a change.
Wang Yunjin, Chief Financial Researcher at Guangkai Chief Industry Research Institute, stated that overall, the current price indices maintain a favorable upward trend, indicating that demand is in a phase of steady recovery. Looking ahead to 2026, with the domestic economy's sustained recovery, the further manifestation of macro-policy effects, and continuous industrial structure optimization, prices are expected to continue their moderate upward trend.
However, viewing the entire year, the sensation of this mild price increase might not be particularly pronounced for most people. Data shows that for the full year of 2025, the national CPI remained flat compared to the previous year, while the PPI fell by 2.6%, and the Industrial Producer Purchase Price Index declined by 3.0%.
The month-on-month CPI turned from a decline to an increase in December, and the year-on-year growth rate continued to expand, with core CPI rising by 1.2%. The core logic behind this shift was the "continued effectiveness of policies aimed at expanding domestic demand and promoting consumption,叠加coupled with increased consumer demand ahead of the New Year's Day holiday." Nevertheless, structural divergence remains evident.
From a year-on-year perspective, the December CPI increased by 0.8%, a growth rate 0.1 percentage points higher than the previous month, reaching the highest level since March 2023. The expansion of the year-on-year increase was primarily driven by a larger rise in food prices. The most tangible feeling might come from the grocery market; within December's food prices, the increases for fresh vegetables and fresh fruits expanded to 18.2% and 4.4% respectively, together contributing approximately 0.16 percentage points more to the year-on-year CPI increase compared to November. Prices for beef, mutton, and aquatic products rose by 6.9%, 4.4%, and 1.6% respectively, with all seeing expanded growth rates; meanwhile, pork prices fell by 14.6%, though the rate of decline narrowed slightly.
In retail settings, prices for many industrial consumer goods also experienced mild increases. In December, the price of industrial consumer goods excluding energy rose by 0.6%, contributing about 0.16 percentage points to the month-on-month CPI increase. Among these, the sustained effects of consumption-boosting policies, combined with increased shopping and entertainment demand around the New Year holiday, led to price increases for communication devices, maternal and infant products, recreational durable goods, and household appliances, with rises ranging between 1.4% and 3.0%. Consequently, the price increase for industrial consumer goods excluding energy became a key driver behind the month-on-month CPI turning positive in December.
Notably, influenced by rising international gold prices, domestic gold jewelry prices increased by 5.6% month-on-month in December. The year-on-year increase for gold jewelry prices further expanded to 68.5%. The current characteristics of the CPI—"month-on-month turning positive, year-on-year warming, core stabilizing"—directly reflect the持续增强sustained strengthening of the momentum behind the recovery of domestic consumer demand. People are becoming more willing to spend, particularly in areas like services, culture and sports entertainment, and quality consumption, where demand is being released.
The Macro and Commodities Team at Shenyin Wanguo Futures pointed out that the core CPI maintaining above 1% for four consecutive months confirms the steady improvement in the fundamentals of household consumption. Rising prices for services and quality consumer goods highlight the trend of consumption upgrading. The overall price trend has shown a良性修复benign recovery态势, providing a stable price environment for the economic rebound.
Regarding the future trajectory of CPI data, Feng Lin, Executive Director of the Research and Development Department at Dongfang Jincheng, indicated that in January 2026, due to the higher base from the same period last year, the timing of the Spring Festival shifting to February this year, and considering the current fluctuation trends of various major goods and services, the year-on-year CPI increase is expected to fall back to around 0.2%.
The PPI's month-on-month increase expanded, while its year-on-year decline narrowed. In December, the PPI rose by 0.2% month-on-month, marking the third consecutive month of increase, with the growth rate expanding by 0.1 percentage points compared to November. The current PPI exhibits the characteristics of "consecutive month-on-month increases with expanding幅度, and a narrowing year-on-year decline."
The month-on-month operation of the PPI in that month had two main features: firstly, improved supply and demand structures drove price increases in some industries; secondly, imported factors caused a divergence in the price trends of domestic non-ferrous metals and petroleum-related industries. Looking at the change in year-on-year data, the持续显效continued effectiveness of various domestic macro-policies, the deepening advancement of building a national unified market, the cultivation and growth of new quality productive forces, and the effective release of consumption potential have driven positive changes in prices for some industries.
A team led by Wen Bin, Chief Economist and Dean of the Research Institute at China Minsheng Bank, noted that the PPI decreased by 2.6% year-on-year in 2025, with the rate of decline expanding by 0.4 percentage points compared to the previous year. In the first half of the year, insufficient external demand led to a decline in prices for internationally priced commodities, which transmitted to the domestic market. Coupled with the domestic economy still being in a period of structural adjustment and the gradual rise in the base from the same period last year, the year-on-year decline in PPI expanded. In the second half of the year, the effects of "anti-involution" policies became apparent, leading to a continuous optimization of the domestic market competition秩序, which helped narrow the PPI decline.
In 2026, with the持续深入deepening implementation of "anti-involution" policies, alongside the rapid development of emerging industries and the effective release of consumption potential, the PPI is expected to enter a recovery cycle. The full-year year-on-year decline is projected to narrow to around 0.5%, but a return to positive territory will still take some time.
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