China’s factory gate prices surged to a 26-year high in October amid a power crisis, according to figures released on Wednesday by the National Bureau of Statistics.
Producer price inflation rose from 10.7% year-on-year in September to 13.5%, versus expectations for 12.3%.
Meanwhile, consumer price inflation rose to a 13-month high of 1.5% in October from 0.7% the month before. This was due partly to a rise in fuel price inflation to a new high of 31.4% from 22.8%.
Julian Evans-Pritchard, senior China economist at Capital Economics, said the jump in producer price inflation largely reflects temporary disruption in a handful of industries from energy shortages, which are already easing.
“There are still few signs of wider price pressures and we think PPI inflation is likely to drop back in the coming months while CPI inflation looks set to remain muted for the foreseeable future,” he said.
“We continue to think that consumer price inflation will remain below 2% in the coming quarters and that inflation is unlikely to be a major constraint on the PBOC’s ability to loosen monetary policy.”
