China’s latest inflation data indicates some progress, but doesn’t signal a macroeconomic shift. According to eToro market analyst Zavier Wong, the December Consumer Price Index (CPI) rose 0.8 per cent year-on-year, marking its strongest pace in almost three years. eToro is a social trading and investment platform that enables people to grow their knowledge and wealth as part of a global community of investors. The company provides access to a wide array of financial instruments.
Wong highlighted the contrast between consumer and producer behaviour. He noted that demand appears to be stabilising at the household level, while producers are still discounting to clear excess capacity. This uneven improvement suggests that while the economy may be edging away from its weakest point, challenges remain.
Despite the uptick in CPI, markets reacted with restraint, with full-year inflation remaining below policymakers’ targets. There is still no clear evidence of a rebound in discretionary spending or services demand. Wong said that the risk of deflation has only receded slightly.
Wong stated that policy support continues to be the primary driver of economic activity. Without more substantial signs of a confidence rebound, price pressures are likely to remain modest well into 2026. He concluded that while the recent data represents progress for China, it does not yet signify a complete economic recovery.
