BEIJING, Nov 9, (Net) – Chinese producer prices rose more than expected to hit a more than four-year high in October, official data showed on Monday, owing to surging energy costs, though consumer inflation remained below target.
Factory gate costs increased 5.7 percent year-on-year last month, the National Bureau of Statistics (NBS) said, topping the 5.3 percent estimated in a Bloomberg survey of economists.
The jump marked the fastest growth in the producer price index since June 2022.
The PPI has steadily picked up since the start of the Iran war at the end of February.
That ended a period of more than three years of falling prices.
“Higher global energy and AI-related electronics prices (continued) to be the main drivers,” wrote Nguyen Hoang Nam of Capital Economics in a note following the data release.
“We expect the external price shock to persist over the coming months but fade next year, with producer prices returning to deflation.”
Other data published on Monday by the NBS showed that domestic demand in the Chinese economy remained weak.
A persistent spending slump has vexed the country’s leaders for years, as the once-booming real estate sector remains mired in a debt crisis.
The consumer price index slid to 0.7 percent year-on-year in October, from 0.9 percent in September and narrowly missing a Bloomberg forecast of 0.8 percent.
The reading is well short of Beijing’s official target for inflation of around two percent.
Despite the lacklustre domestic activity, China’s economy has been supported in recent years by a historic boom in exports, driven in part by surging global demand for AI-related products.
Trade figures due Tuesday are expected to show the strong performance continued through October.
Beijing is targeting annual growth in gross domestic product this year of 4.5-5.0 percent, its lowest goal in decades.
The economy expanded 4.5 percent in the third quarter, a slight improvement from 4.3 percent in the previous three months.
