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Macro EconomyMedium•14 April 2026•

1 min read

China Factory Prices End 3-Year Deflationary Streak as PPI Rises 0.5%

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Key Facts

1China's Producer Price Index (PPI) rose 0.5% year-on-year in March, beating expectations of a 0.4% increase.

2The reading ended a 41-month run of contraction in producer prices.

China's Producer Price Index (PPI) returned to growth in March, marking the end of a 41-month deflationary period for factory-gate prices. The index rose 0.5% year-on-year, slightly exceeding market expectations of a 0.4% increase. This turnaround was primarily driven by the surge in global oil prices, which pushed up industrial production costs across the sector. In contrast, the Consumer Price Index (CPI) slowed to 1% from 1.3% in February, highlighting persistent weakness in domestic demand. Analysts note a significant divergence between rising industrial costs and soft consumer spending, which could complicate the economic outlook. While the end of factory deflation is positive for industrial margins, the broader recovery remains fragile due to sluggish consumption.