China's February factory-gate prices rise at slowest pace in 8 months

[BEIJING] China's producer prices in February rose at the slowest annual pace since June, official data showed on Wednesday, amid skyrocketing commodity prices, an uncertain global economy and resurgent domestic Covid-19 outbreaks.

The producer price index (PPI) increased 8.8 per cent on year, the National Bureau of Statistics (NBS) said in a statement on Wednesday, easing from 9.1 per cent growth in January.

Analysts in a Reuters poll had expected the PPI to rise 8.7 per cent, moderating slightly from a month earlier.

China's consumer price index (CPI) inched up 0.9 per cent in February, the data showed, unchanged from the growth in January and market expectations.

China's efforts to stabilise commodity prices face new challenges due to high prices for coal, natural gas and iron ore because of Covid-19, a monetary policy shift in big economies and geopolitical conflicts, an official at the state economic planner said on Monday.

Already elevated energy and global commodities prices have soared to decade-high levels amid fears of supply disruptions after Russia's invasion of Ukraine, adding to months-long strains for China's factories and putting further pressure on China to contain raw material costs.

China sources more than 70 per cent of its oil and 40 per cent of its gas from overseas even as the government races to increase domestic output.

The Chinese government left its 2022 CPI target, unveiled on Saturday, at around 3 per cent, unchanged from 2021. Last year, the CPI rose just 0.9 per cent, reined in by cautious consumer spending weakened by a slowing economy and domestic Covid-19 outbreaks.

China is targeting slower economic growth of around 5.5 per cent in 2022, with the government citing multiple headwinds at home and abroad. REUTERS