PPI moderates m/m as energy gains ease

Research evidence excerpt

PPI moderates m/m as energy gains ease

FICC Research

Economics

10 July 2026

China Outlook

PPI moderates m/m as energy

gains ease

High input costs and tech manufacturing continued to Jian Chang

support PPI, while m/m momentum softened as energy- +852 2903 2654

jian.chang@barclays.com

related price gains moderated on lower oil prices. Core CPI Barclays Bank, Hong Kong

inflation inched down for a second consecutive month, Yingke Zhou

reflecting persistent weakness in domestic demand. +852 2903 2653 yingke.zhou@barclays.com

Barclays Bank, Hong Kong

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The June price data suggest that oil prices continued to support y/y PPI inflation and the energy Barclays Bank, Hong Kong

component of CPI, although the contribution moderated as global oil prices moved lower. Core

CPI softened for a second consecutive month, reflecting continued weakness in housing rents

and auto prices, while food prices remained in deflation, highlighting soft domestic demand.

PPI inflation accelerated to 4.1% y/y from 3.9%. However, part of the increase reflected base

effects, with the carryover effect turning positive at 0.2pp from -0.2pp in May, and coal sector

prices saw stronger gains during the hotter summer weather. Looking ahead, y/y PPI growth

may be approaching a peak, as gains in AI- and high-tech-related sectors could be increasingly

offset by a smaller energy contribution, as global oil prices normalize. That said, recent

geopolitical developments in the Middle East may add near-term uncertainty to the energy price

outlook and lead to price volatility.

On a month-over-month basis, softer PPI momentum may be more obvious.