China’s annual inflation accelerated to 1.2% in April 2026 from 1.0% in the previous month, exceeding market expectations of 0.8%. Non-food inflation climbed (1.8% vs 1.2% in March), with transport costs picking up significantly (4.6% vs 0.9%), amid higher energy prices and supply chain disruptions linked to the prolonged Middle East conflict. Also, prices continued to rise for clothing (1.5% vs 1.6%), healthcare (2.2% vs 1.9%), and education (1.3% vs 1.1%). In contrast, a decline in housing costs lingered (-0.2% vs -0.2%). On the food side, prices fell 1.6%, reversing a 0.3% increase in March and marking the first drop since January, reflecting persistently weak pork prices and declines in costs of fresh vegetables and fresh fruits. Core inflation, excluding food and energy, rose 1.2% yoy, after March's 1.1% gain. On a monthly basis, the CPI increased 0.3%, swinging from a 0.7% fall previously and defying consensus for a 0.1% decline.