China Factory Prices Jump 5 Percent, Fastest Surge Since June 2022
(MENAFN) Chinese producer prices climbed 5% year-on-year in September, the sharpest rise since June 2022, as surging fuel costs squeezed businesses, the National Bureau of Statistics said Wednesday. The producer price index accelerated from 3.8% in August.
The bureau attributed part of the increase to coal, where prices rose on stronger winter heating demand, temporary supply tightness in major producing regions and expectations of higher international prices.
Consumer inflation edged up to 0.9% from 0.8% in August. Gasoline prices jumped 16.6%, adding roughly 0.47 percentage points to the annual rate, said Dong Lijuan, chief statistician of the bureau’s urban division. Falling food prices, down 1.7%, shaved about 0.29 percentage points off headline inflation and cushioned the effect of costlier fuel. Core inflation, which strips out volatile food and energy costs, held at 1%.
The data revealed a widening gap between producer and consumer inflation, with rising industrial costs met by comparatively modest increases in consumer prices.
The figures land as the economy loses momentum. Growth slowed to 4.3% year-on-year in the second quarter, the weakest pace in more than three years. August data showed retail sales growth falling short of expectations, even as industrial output beat forecasts.
The State Council signaled at a Sept. 28 meeting that more economic support could be on the way, calling for stronger countercyclical macroeconomic policy adjustments to tackle emerging challenges.
Lynn Song, chief economist for Greater China at ING, said in a research note that the meeting marked a shift in tone and suggested further policy support was likely to help meet both short- and long-term growth objectives. Those include China’s 4.5%-5% growth target for 2026 and its longer-term goal of doubling GDP between 2020 and 2035, he added.
The bureau attributed part of the increase to coal, where prices rose on stronger winter heating demand, temporary supply tightness in major producing regions and expectations of higher international prices.
Consumer inflation edged up to 0.9% from 0.8% in August. Gasoline prices jumped 16.6%, adding roughly 0.47 percentage points to the annual rate, said Dong Lijuan, chief statistician of the bureau’s urban division. Falling food prices, down 1.7%, shaved about 0.29 percentage points off headline inflation and cushioned the effect of costlier fuel. Core inflation, which strips out volatile food and energy costs, held at 1%.
The data revealed a widening gap between producer and consumer inflation, with rising industrial costs met by comparatively modest increases in consumer prices.
The figures land as the economy loses momentum. Growth slowed to 4.3% year-on-year in the second quarter, the weakest pace in more than three years. August data showed retail sales growth falling short of expectations, even as industrial output beat forecasts.
The State Council signaled at a Sept. 28 meeting that more economic support could be on the way, calling for stronger countercyclical macroeconomic policy adjustments to tackle emerging challenges.
Lynn Song, chief economist for Greater China at ING, said in a research note that the meeting marked a shift in tone and suggested further policy support was likely to help meet both short- and long-term growth objectives. Those include China’s 4.5%-5% growth target for 2026 and its longer-term goal of doubling GDP between 2020 and 2035, he added.
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