Consumer prices in China last month rose 2.7% year on year, the highest level in two years. All seven categories tracked in the index rose in July, with price rises in food, alcohol, and tobacco contributing 1.28% to the rise.
Fruit prices spiked 16.9% compared to last year, vegetable prices firmed 12.9%, and pork rose 20.2%. Mutton and aquaculture products were the only food categories which fell, declining 4.4% and 2.9% respectively.
Local brokerage Guotai Futures said CPI is likely to rise above 3% due to increases in vegetable and meat prices. Some of this is buffered by smaller increases in the price of services, but the broker noted that this relative weakness was due to economic disruptions caused by Covid restrictions.
This economic impact is likely to continue as Covid case numbers continue to rise across China. On Wednesday, the country reported 952 new cases across 20 provinces and regions.