Core CPI Growth Widens for Three Consecutive Months as Domestic Demand-Stimulating Policies Continue to Deliver

On August 9, the National Bureau of Statistics released data showing that in July the Consumer Price Index (CPI) reversed a 0.1% month-on-month decline to record a 0.4% increase, while remaining unchanged year-on-year. Excluding food and energy, the core CPI rose 0.8% year-on-year—its third consecutive month of accelerating growth. As policies aimed at expanding domestic demand continue to take effect, consumer-sector prices exhibit sustained positive momentum, and ongoing improvements in market competition are expected to support price gains in select industries.

The outperformance of July’s month-on-month CPI relative to seasonal norms underscores an improving consumption landscape. National Bureau of Statistics calculations indicate that the 0.4% increase exceeded the typical seasonal level by 0.1 percentage point.

According to Dong Lijuan, chief statistician in the NBS Urban Department, the month-on-month rise was driven primarily by higher service and industrial consumer goods prices. Service prices climbed 0.6%, contributing approximately 0.26 percentage point to the CPI’s overall increase and accounting for over 60% of the total gain. Peak summer travel drove prices for airfares, tourism, hotel accommodations, and vehicle rentals above their seasonal averages.

Industrial consumer goods prices rose 0.5% month-on-month—0.4 percentage point higher than in June. Energy prices increased 1.6% amid international oil price fluctuations, adding about 0.12 percentage point to the CPI’s month-on-month rise. Excluding energy and following the conclusion of the “618” promotional event, other industrial consumer goods prices advanced 0.2% as consumption-stimulus measures continued to revive demand.

In July, the CPI held steady year-on-year, a result largely of lower food prices. A high base from the same period last year drove a 1.6% decline in food prices, widening the year-on-year decrease by 1.3 percentage points from June. Drops in fresh vegetable and fruit prices were the principal factors that neutralized the CPI’s year-on-year growth.

Excluding food and energy, the core CPI’s 0.8% year-on-year increase was 0.1 percentage point higher than in June and represented the largest gain since March 2024, further highlighting positive consumer-market dynamics.

Subcategory data show that in July gold and platinum jewelry prices rose 37.1% and 27.3% year-on-year, respectively, together contributing roughly 0.22 percentage point to CPI growth. Service prices climbed 0.5% year-on-year, maintaining stable expansion, while prices for gasoline-powered and new-energy passenger vehicles fell 2.6% and 1.9%, marking their smallest declines in 34 and 28 months, respectively.

Analysts note that the combined effect of new and existing policy measures continues to enhance the supply–demand balance and will provide support for price stability across related sectors.
On monetary policy, the People’s Bank of China’s recent work meeting for the second half of 2025 emphasized ongoing challenges—insufficient domestic demand, persistently low price levels, and multiple risk factors. The meeting called for maintaining a moderately accommodative monetary stance, strengthening counter-cyclical adjustments, optimizing both quantitative and structural tools, and deepening coordination between monetary and fiscal policies to sustain stable economic growth and keep prices within reasonable bounds.