The National Bureau of Statistics of China (NBS) released data on Monday, Apr 11, saying the producer price index (PPI) in March increased 8.3% year-on-year. PPI reflects the prices that factories charge wholesalers for products, down from 8.8% growth in February.
This was above the 8.1% growth expectations in a Bloomberg survey of economists.
China’s consumer price index (CPI) inched up 1.5% year-on-year, rising from 0.9% in February, the fastest pace in three months.
The South China Morning Post cited the Capital Economics saying, the main drivers of PPI rising “were higher prices of oil, gas and iron ore.”
Increased global commodities prices caused by the Russia-Ukraine war and the latest outbreak with its strict “zero-Covid” strategy might add to China’s inflation risks.
Nomura analysts led by Lu Ting told the South China Morning Post that CPI might rise more than 2 percent in April “as households across China have been stocking up food and other necessities after observing the fallout from the Shanghai lockdown.”
“Looking further ahead, due to lockdowns and transport disruptions in Northeast China, the largest grain production base in China, this year’s spring planting of crops may have been delayed and the risk of food shortage may rise in the second half of this year, adding further pressure to the worsening global food shortage caused by the ongoing military conflict in Ukraine.”
Zhang Zhiwei, a chief economist at Pinpoint Asset Management, said, “CPI inflation rose, while PPI inflation edged lower. Overall consumer price inflation will likely stay low, due to the weak domestic demand, as many cities are locked down.”