Goldman Sachs has raised its forecasts for China's CPI and PPI this year to 0.8% and 0.3%, respectively

Goldman Sachs research report indicates that China's overall Consumer Price Index (CPI) in February rose by 1.3% year-on-year, up from 0.2% in January, mainly driven by increases in food prices and tourism-related service prices, largely related to the Lunar New Year holiday being later than in previous years. The Producer Price Index (PPI) in February saw a year-on-year decline narrowing to 0.9% from 1.4% in January, primarily influenced by high prices of non-ferrous metals.

Taking into account the February data and the rise in energy prices due to disruptions in the Strait of Hormuz, the bank has raised its full-year CPI and PPI inflation forecasts for 2026 to 0.8% and 0.3% respectively (previously expected to rise by 0.6% and fall by 0.5%), reflecting stronger quarter-on-quarter price increases in the first and second quarters. According to the revised forecast path, the year-on-year increase in PPI may turn positive as early as the beginning of the second quarter this year