China’s factory prices rise at fastest pace since August 2008 By Reuters

0
29
2/2
© Reuters. FILE PHOTO: People wearing face masks shop at a market, following new cases of the coronavirus disease (COVID-19) in the country, in Beijing, China January 11, 2021. REUTERS/Tingshu Wang

2/2

BEIJING (Reuters) -China’s factory gate inflation hit a 13-year high in August, as commodity prices remained elevated despite Beijing’s attempts to cool them.

The producer price index (PPI) rose 9.5% from a year earlier in August, the National Bureau of Statistics (NBS) said on Thursday, faster than the 9.0% increase tipped in a Reuters poll and the 9.0% reported in July.

That was the fastest pace since August 2008.

China’s economy has recovered strongly from last year’s coronavirus slump but has been losing steam recently due to domestic COVID-19 outbreaks, high raw material prices, tighter property curbs and a campaign to reduce carbon emissions.

Commodity prices have been on a tear in recent months, hurting the bottom lines of many mid- and downstream factories. China’s coal prices soared to a record high on Tuesday over supply concerns as major coal regions started fresh rounds of safety checks.

A separate NBS statement showed that the consumer price index (CPI) in August rose 0.8% from a year earlier, compared with a 1.0% gain in a Reuters poll and below the government target of around 3% this year.

China tightened social restrictions to curb the COVID-19 Delta variant including travel limits, which have hampered services sector demand, although Beijing has largely contained the latest coronavirus outbreaks.

Service-sector activity plunged in August to the lowest level since the pandemic’s first wave in April 2020, a survey showed, as COVID-19 restrictions threatened to derail the recovery.

Analysts expect the People’s Bank of China to deliver a further cut to the amount of cash banks must hold as reserves later this year to lift growth, on top of July’s cut which released around 1 trillion yuan ($6.47 trillion) in long-term liquidity into the economy.

The core consumer price index, which strips out volatile food and energy prices, stood at 1.2% on year, versus a 1.3% rise in July.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.