Producer prices in China rise at fastest pace since June 2022, beating expectations
The increase was higher than the 4.5% expected by economists polled by Reuters, and higher than the 3.8% seen in the previous month.
Key points
- China's producer price index rose 5% in September, the fastest pace in over four years.
- The reading beat the 4.5% forecast by economists polled by Reuters.
- Consumer prices rose 0.9%, slightly below the 1% expected.
China's producer price index rose 5% in September, its fastest increase in more than four years, according to CNBC. The figure beat the 4.5% expected by economists polled by Reuters and was sharply higher than the 3.8% recorded the previous month.
Higher fuel prices pushed up business costs, the report said. Consumer prices rose 0.9% in September, marginally below the 1% expected but above the 0.8% seen a month earlier.
Economic backdrop
The inflation data arrive as China's economy deals with its lowest growth rate in more than three years. Second-quarter GDP growth missed expectations at 4.3%, while August data showed retail sales expanding more slowly than expected and industrial output beating expectations.
It marks a bit of a shift in tone,
— Lynn Song, chief economist for Greater China at ING
Signals of more support
On Sept 28, a State Council readout indicated more policy support could be coming, saying that "countercyclical adjustments will be intensified in response to current problems in the economy."
Lynn Song, chief economist for Greater China at ING, wrote that "It marks a bit of a shift in tone," adding that further policy support rollouts would follow to meet short- and long-term growth targets. She cited the 4.5%-5.0% GDP growth target for 2026 and the goal to double GDP from 2020 to 2035.
