The producer price index (PPI) rose 6.1% year on year, the National Bureau of Statistics (NBS) said on Saturday, after rising 6.4% in May. This is a faster rate than expectations of a 6.0% growth announcement in a Reuters poll.
The Consumer Price Index (CPI) rose 2.5% from a year earlier, higher than the 2.1% increase recorded in May and the highest in 23 months. In a Reuters poll, the CPI was expected to rise 2.4%.
The CPI remained stable month on month, after falling 0.2% in May, beating the 0.1% decline in a Reuters poll.
The world’s second-largest economy has shown some signs of recovery in recent months after a brutal COVID-induced collapse, although headwinds to growth persist, including weak consumer spending and concerns about possible waves of recurring infections.
COVID-19 containment measures were lifted in Shanghai and other major cities in June, but some regions have recently reported a spike in cases, which could slow or even stall the recovery.
China plans to set up a 500 billion yuan ($75 billion) state infrastructure fund to revive the economy, two people with knowledge of the matter told Reuters.
Producer inflation has cooled this year after hitting its highest level in 26 years in October due to a rise in commodity prices.
This situation contrasts sharply with the surge in global inflation which prompted the main central banks of the rest of the world to raise their interest rates.
At the end of June, the Governor of the People’s Bank of China (PBOC), Yi Gang, pledged to maintain an accommodating monetary policy to support the economic recovery.
The resumption of consumer price inflation follows a surge in pork prices and adds pressure on the country’s policy makers to implement more supportive monetary policy, although rates are still below average. government objective of an increase of about 3%.
($1 = 6.7019 Chinese yuan)