China's consumer prices reach six-month high
Thursday, 12 May 2022
BEIJING, May 11 (CNBC): China's consumer and producer prices rose more than expected in April, according to data from the National Bureau of Statistics released Wednesday.
The consumer price index rose by 2.1 per cent last month from a year ago, boosted by a surge in energy and fresh vegetable costs. The reading topped expectations for a 1.8 per cent rise forecast by a Reuters poll.
April's figure was also the highest since November's 2.3 per cent print and well above the 18-month average of 0.9 per cent consumer price inflation. China's official CPI target for 2022 is "around 3 per cent ."
"The main driver was a pick up of food prices due to rising transportation costs and restocking demand from tighter Covid restrictions," Goldman Sachs analysts said in a report Wednesday.
"In year-over-year terms, we expect CPI inflation to rise and PPI inflation to fall on base effects," the report said. "Sequentially CPI inflation may moderate in the near term as the inflationary pressures from food prices might ease with the improved Covid situation in China."
Since March, mainland China has tightened travel restrictions and imposed stay-home orders in many parts of cities to contain the country's worst Covid outbreak since early 2020. The controls have prevented many factories from producing at full capacity or moving goods between suppliers and customers.
Fresh vegetable prices rose by 24 per cent year-on-year in April, while fresh fruit prices increased by 14.1 per cent during that time. Pork prices, a major contributor to China's CPI, posted a relatively rare 1.5 per cent increase from the prior month for a more moderate year-on-year drop of 33.3 per cent .
Fuel prices for transportation climbed by 28.4 per cent from a year earlier, reflecting recent surges in oil and commodities prices.
However, China's rising consumer price index doesn't mean locals face the same pressure that Americans do.
In China, excluding food and energy prices, the consumer price index rose by a muted 0.9 per cent in April from a year ago.