(Yicai) Jan. 12 -- Consumer prices in China edged up in December 2025 to the highest level since March 2023, largely driven by higher food prices, according to the latest data.

The consumer price index, which is a key gauge of inflation, increased by 0.8 percent last month from a year earlier, according to data released by the National Bureau of Statistics on Jan. 9. Month on month, it climbed 0.2 percent.

The core CPI, which excludes food and energy prices, advanced 1.2 percent year on year. This marks the fourth consecutive month that the core inflation rate has stayed above 1 percent.

The year-on-year increase was primarily driven by higher food prices, said Dong Lijuan, chief statistician at the NBS' Urban Division.

In December 2025, food prices advanced 1.1 percent from the year before, a widening of 0.9 percentage point compared to the previous month’s gains. This contributed approximately 0.17 percentage point more to the CPI increase than in November.

Meanwhile, China's producer price index, which is a measure of industrial profits, climbed 0.2 percent in December 2025 from the previous month, but tumbled 1.9 percent year-on-year, according to the NBS. This reflects both the impact of international commodity prices and the continued effectiveness of policies to manage capacity in key domestic industries.

Macroeconomic policies continue to be effective, with prices in certain sectors moving in a positive direction, Dong said. The construction of a unified national market is progressing, and year-on-year price declines in related industries continue to narrow.

As policies aimed at expanding domestic demand take effect and as the modernization of the industrial system accelerates, along with ongoing capacity management in key industries and improved market competition, prices are expected to rise moderately from a low level, said Wen Bin, chief economist of China Minsheng Bank.

This year prices are likely to return to positive growth, thereby reducing deflation risks and supporting price recovery, said Yang Delong, chief economist of First Seafront Fund Management. This will create a healthy inflation trend and boost confidence among investors and consumers.

Editor: Kim Taylor