Beijing: China’s producer price inflation accelerated more than expected to a four-month high in August, fuelled by strong gains in raw materials prices and pointing to strong, sustained growth for both factory profits and the economy.
Consumer inflation also quickened more than forecast to a seven-month high, amid signs that upstream price gains are trickling through, but analysts said price gains remain modest and there is little pressure on the central bank to tighten policy further.
“The unexpected rise in both CPI and PPI suggests that there is little hope China’s monetary policy could see some relaxation before the end of this year,” Zhou Hao, a Singapore-based analyst at Commerzbank.
“We believe that the market has underestimated the inflationary pressure facing China’s economy, although inflation is unlikely to surge in the foreseeable future. That said, onshore rates are still on the rise,” he said, referring to higher financing costs.
China’s producer price index (PPI) rose 6.3 percent in August from a year earlier, from 5.5 percent in July, the National Bureau of Statistics said yesterday.
Analysts polled by Reuters had expected producer inflation would edge up to 5.6 percent, its first pickup in six months.
On a month-on-month basis, the PPI rose 0.9 percent.
The price data added to a long list of upside surprises for the world’s second-largest economy this year, which has so far defied analysts’ expectations of a slowdown.
