April data shows China’s producer prices rose 2.8% year-on-year, exceeding forecasts and ending a 41-month deflationary streak.
China’s producer price index surged 2.8% year-on-year in April, marking its highest level since July 2022 and surpassing Reuters poll forecasts of 1.6%. The rise ends a 41-month deflationary streak that began in late 2022, driven by escalating energy costs linked to geopolitical tensions in the Middle East.
Consumer prices also accelerated, with CPI rising 1.2% year-on-year, above the 0.9% estimate and up from March’s 1.0%. Core CPI, excluding food and fuel, climbed to 1.2% from 1.1%, signaling broadening price pressures beyond energy. The National Bureau of Statistics cited higher costs in non-ferrous metals, oil, gas, and tech equipment as key drivers.
Economists caution that cost-driven inflation may squeeze business margins and limit Beijing’s ability to ease monetary policy. The People’s Bank of China may face challenges justifying rate cuts as price pressures mount, potentially dampening stimulus efforts amid subdued domestic demand.