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China producer inflation picks up for first time in 9 months
CHINA'S factory-gate inflation picked up for the first time in nine months in March, lifted by price rises in global commodities as well as signs that government efforts to boost the economy may be putting a floor under domestic demand.
Consumer inflation also quickened, jumping to the highest since October 2018 as pork prices soared due to a growing epidemic of swine fever, official data showed on Thursday.
The step-up in producer inflation, while slight, will ease deflation worries and likely add to optimism that the economy is starting to turn the corner. Recent surveys showed factory activity expanded for the first time in months in March.
But analysts urge caution, saying it will take a few more months of better data and further policy support from Beijing to see if a recovery can be sustained.
China's producer price index (PPI) in March rose 0.4 per cent from a year earlier, driven largely by rapid rises in oil and gas prices, and advancing from a 0.1 per cent increase in February, the National Bureau of Statistics said. That was in line with analysts' forecasts in a Reuters poll. Most of the gain was in mining, with prices rising 4.2 per cent on-year, up from 1.8 per cent in February. Drops in raw material prices also moderated.
Beijing is fast-tracking more infrastructure projects, which is pushing up prices of construction materials.
Surging iron ore prices hit a record domestically on Tuesday, fuelled by concerns over tight global supply after disruptions to production and shipments at top miners in Brazil and Australia. Prices of steel reinforcing bars used in building hit a 71/2 year high this week.
Consumer inflation accelerated to 2.3 per cent in March from a year earlier, up from 1.5 per cent in February and posting the biggest jump in more than a year. The surge was mostly led by rising vegetable and pork prices, which drove the CPI up by more than half a percentage point, according to the National Bureau of Statistics.
Core consumer prices, excluding food and energy, stayed flat at 1.8 per cent, and factory inflation halted a dis-inflationary slide, gaining 0.4 per cent. REUTERS, BLOOMBERG