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Ex-factory prices in China rose at their fastest pace in 26 years in October, as fuel shortages and rising raw material prices slowed supply, official data showed on Wednesday.
The producer price index rose 13.5% from October 2020, above the 12.4% forecast by analysts polled by Reuters. The jump was the highest since 1995. Last month, the PPI was up 10.7 percent, the highest level in more than 25 years.
Consumer price inflation also picked up, with the CPI 1.5% higher than a year ago, down from 0.7% in September.
Dong Lijuan, a statistician at the National Bureau of Statistics, said that the increase in the PPI in October was the result of “the combined impact of international imported factors and the tight supply of crucial domestic energy and raw materials.”
Producer prices also rose 2.5% in the month from September, the NBS said. Dong noted that the rise in the price of oil, which topped $ 85 per barrel last month, and the price of coal, which reached 2,301 Rmb ($ 360) per tonne, were major factors in the increase. monthly.
Dong also said that the prices of production raw materials rose 17.9% from October last year, while prices in the coal mining and washing industries rose by 103, 7%.
Julian Evans-Pritchard, an economist at Capital Economics, said factory exit inflation in China was likely near a peak as the energy crisis eased and coal prices began to fall.
“More fundamentally, we expect domestic and foreign demand to slow down over the next few quarters, further reducing the likelihood that temporary supply-side problems will lead to a sustained rise in inflation,” he said. declared.