China's CPI rises, PPI returns to growth after 41-month decline

China's consumer prices recorded a mild increase in March, while factory gate prices returned to growth for the first time in more than three years, driven by imported inflationary pressures, official data showed on Friday.

The consumer price index (CPI), a main gauge of inflation, rose 1 percent year on year last month, according to the National Bureau of Statistics (NBS).

On a month-on-month basis, CPI fell 0.7 percent in March, which NBS statistician Dong Lijuan attributed to seasonal moderation following the Spring Festival holiday.

The core CPI, which excludes food and energy prices, increased 1.1 percent year on year.

A breakdown of the data showed that industrial goods prices climbed 2.2 percent year on year, contributing 0.67 percentage points to the CPI increase. This was underpinned by a 65.8-percent surge in gold jewelry prices, while gasoline prices returned to growth with a 3.8-percent gain.

Service sectors saw moderated price growth. Travel agency services, hotel accommodation, air tickets, and vehicle rentals saw increases ease to 0.9 to 3.3 percent year on year, while pet services, vehicle repairs and maintenance, domestic services, and dining out rose by 1.2 to 1.6 percent year on year.

Regarding the monthly decline, food prices played a major role, sliding 2.7 percent from February and dragging the CPI down by 0.48 percentage points. Fresh vegetables and fruit prices dropped 10.1 percent and 3.3 percent, respectively, due to increased supply from warmer weather and a post-holiday dip in demand.

Service prices declined 1.1 percent month on month, reversing a 1.1-percent rise registered in February, knocking 0.51 percentage points off the monthly CPI reading.

China has set a CPI growth target of around 2 percent for 2026, according to this year's government work report.

Friday's data also showed that the producer price index (PPI), which measures costs for goods at the factory gate, returned to year-on-year growth in March, ending a 41-month streak of decline, according to the NBS.

The PPI rose 0.5 percent year on year in March, reversing a 0.9-percent drop in February.

The turnaround was mainly due to imported inflationary pressures and improved supply-demand dynamics in some domestic industries, Dong added.