China’s factory gate inflation rose at the highest rate in more than a decade last month, official data showed Wednesday, as the world’s second-largest economy works to contain a surge in commodity prices.
Factories so far seem to be absorbing costs rather than passing them on to consumers as domestic demand recovers from the strict coronavirus lockdowns imposed last year.
The producer price index (PPI), which measures the cost of goods at the factory gate, exceeded expectations to spike 9.0% on-year in May, said the National Bureau of Statistics.
This marks its highest jump since September 2008.
In particular, prices in the oil and natural gas extraction industry rose 99.1% from a year ago, said NBS senior statistician Dong Lijuan.
But consumer prices were “generally stable,” Dong said.
The consumer price index (CPI), a key gauge of retail inflation, rose less than expected to 1.3% on-year, official data showed.
China’s CPI has been driven up in recent years by pork prices after an African swine fever outbreak ravaged stocks, but this has since mostly stabilized with boosted supplies of the staple meat.
Dong said Wednesday that “live pig production continued to recover and the pork supply continued to increase.”