BEIJING (REUTERS) – China\u2019s factory gate prices rose at the fastest rate in three and a half years in April, official data showed on Tuesday (May 11), as the world\u2019s second-largest economy continued to gather momentum following record-setting growth in the first quarter.<\/p>\n
The producer price index (PPI), a gauge of industrial profitability, rose 6.8 per cent from a year earlier, the National Bureau of Statistics said, ahead of a 6.5 per cent rise tipped by a Reuters poll of analysts and a 4.4 per cent rise in March. The consumer price index (CPI), however, rose a modest 0.9 per cent.<\/p>\n
Investors globally are increasingly worried that pandemic-driven stimulus measures could spark a rapid rise in inflation and force central banks to raise interest rates and take other tightening measures, potentially holding back economic recovery.<\/p>\n
\u201cPrice surges have spread to mid-stream products, and will continue to affect mid-stream and downstream merchandise, driving an increase in costs for the whole society,\u201d said Hu Yanhong, an analyst at Yingda Securities.<\/p>\n
\u201cIt could become an obstacle to the economic advances.\u201d<\/p>\n
Chinese authorities have repeatedly said they will avoid sudden policy shifts that could derail the recovery, but are slowly normalising policy and clamping down on property speculation in particular.<\/p>\n
The sharp jump in producer prices included an 85.8 per cent surge in the oil and natural gas extraction sector from a year ago, while the melting and processing of ferrous metals rose 30 per cent, said Dong Lijuan, senior NBS statistician in a statement accompanying the data release.<\/p>\n
Still, PPI rose 0.9 per cent in April from a month ago, easing from a 1.6 per cent gain the previous month.<\/p>\n
China\u2019s export growth beat market expectations in April while imports for the month hit a decade high, official data showed on Friday, underscoring robust economic activity for the world\u2019s second-largest economy.<\/p>\n
The country\u2019s gross domestic product (GDP) expanded by a record 18.3 per cent in annual terms in the first quarter as the country recovers from the devastating impact of Covid-19. Many economists expect China\u2019s GDP growth to exceed 8 per cent in 2021, although some warn that continuing global supply chain disruptions and higher comparison bases will sap some momentum in coming quarters.<\/p>\n
The 0.9 per cent CPI increase in April from a year earlier was up on a 0.4 per cent rise in March, driven mostly by gains in non-food prices. However, it missed analysts\u2019 expectations for a 1.0 per cent rise.<\/p>\n
Food inflation remained weak. Prices dropped by 0.7 per cent from a year earlier, unchanged from the previous month, weighed by falling pork prices.<\/p>\n
Non-food inflation accelerated to 1.3 per cent year-on-year in April from 0.7 per cent increase in the previous month, as airfares and retail oil prices surged.<\/p>\n
Core inflation, which excludes volatile energy and food prices, rose 0.7 per cent in April, up from 0.3 per cent in March.<\/p>\n
Despite rising pressure from imported global inflation, China\u2019s full-year CPI is likely to be significantly below the official target of around 3 per cent, deputy director at NBS Sheng Laiyun, said on Friday in an interview with Economics Daily.<\/p>\n
Mr Sheng attributed China\u2019s likely muted inflation to currently slow core inflation, economic fundamentals where supply has outstripped demand, relatively restrained macropolicy support, recovering pork supply and a limited pass-through effect from PPI to CPI.\u00a0<\/p>\n
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