China Producer Prices Jump to 45-Month High as Energy Costs Rise

China’s producer prices exceeded expectations in April, rising to a 45-month high as elevated global energy costs increased pressure on manufacturers already facing weak domestic demand, Yukun Zhang and Liz Lee reported for Reuters.

Rising energy and commodity prices pushed China’s factory inflation to a 45-month high in April. (Photo: BYD)

Analysts said the inflation surge was primarily driven by cost pressures and was unlikely to prompt immediate policy action, as it reduces the urgency for additional monetary easing to support growth.

The producer price index (PPI) rose 2.8% year-on-year, according to data released Monday by China’s National Bureau of Statistics of China.

That exceeded the 1.6% increase forecast in a Reuters poll.

The index had already reversed a 41-month decline in March, when prices increased 0.5%.

“The fallout from the Iran war pushed up inflation again in April, but price pressures remain narrow in scope and aren’t likely to build into a wider reflationary impulse,” analysts at Capital Economics said.

On a month-on-month basis, PPI increased 1.7% in April after rising 1% in March.

The National Bureau of Statistics attributed the stronger factory-gate inflation to rising prices in sectors including non-ferrous metals, oil and gas, and technology equipment, according to statistician Huo Lihui.