China’s Inflation Declines for Four Straight Months, Reflecting Sluggish Consumer Demand

Official data released on Monday showed that inflation in China declined for the fourth straight month in May, reflecting persistent weakness in consumer spending and posing ongoing challenges for the recovery of the world’s second-largest economy.

According to the National Bureau of Statistics (NBS), the Consumer Price Index (CPI)—a key measure of inflation—dropped by 0.1% year-on-year. This reading matched the decline recorded in April but was slightly better than the 0.2% decrease forecast by economists surveyed by Bloomberg.

China continues to struggle with reviving domestic consumption, which has remained sluggish since the end of the COVID-19 pandemic. This weak consumer sentiment threatens the country’s official growth targets and complicates Beijing’s efforts to shield its economy from global trade disruptions, especially those triggered by former U.S. President Donald Trump’s wave of tariffs.

The NBS also reported a further decline in factory-gate prices. The Producer Price Index (PPI), which tracks prices at the factory level, fell by 3.3% in May—steeper than the 2.7% drop in April and slightly worse than Bloomberg’s forecast of a 3.2% decline. The data underscores a prolonged industrial slump that has persisted for over two years.