China inflation eases to 1.0% as energy costs cool

China's consumer inflation eased to 1.0 percent year on year in June as energy and commodity prices cooled, official data showed Thursday.

The consumer price index rose 1.0 percent last month, down from 1.2 percent in May, according to the National Bureau of Statistics. The figure was below a Bloomberg forecast of 1.1 percent and remained under the government's two percent target for the year.

Dong Lijuan, chief statistician at the statistics bureau, said imported international price pressures helped slow price increases for domestic industrial consumer goods. She said price growth for gold jewellery and gasoline also eased.

Julian Evans-Pritchard, head of China economics at Capital Economics, said the inflation rise caused by the Iran war “continued to unwind in June” as oil and other commodity prices fell. He said renewed US-Iran tensions could add near-term pressure, but expected the effect to remain limited to narrow areas.

China's producer price index, which measures wholesale inflation, rose 4.1 percent year on year in June, up from 3.9 percent in May and in line with Bloomberg's forecast. The increase was the quickest since July 2022, when producer prices rose 4.2 percent.