China Producer Inflation Hits 3-Year High Amid Energy Surge

(MENAFN) China’s factory-gate inflation accelerated further in May, extending a months-long rebound fueled by higher global energy and commodity costs linked to the conflict involving the United States, Israel, and Iran.

Data released by the National Bureau of Statistics of China (NBS) showed that the Producer Price Index (PPI) increased 3.9% year-on-year in May, marking a continued recovery after years of declining producer prices.

The latest reading follows a gradual turnaround that began earlier this year. The PPI had contracted by 1.4% in January and 0.9% in February before returning to growth with a 0.5% increase in March, when the initial economic effects of the Middle East conflict began to emerge. The index then climbed 2.8% in April before accelerating further in May.

The rise marks a significant shift from the prolonged downturn that started in the fourth quarter of 2022 and persisted over the next three years. During that period, the index fell by 3% in 2023, declined 2.2% in 2024, and dropped another 2.6% in 2025.

Consumer prices edge higher
China’s consumer inflation also remained positive in May, suggesting that rising production costs are gradually feeding into the broader economy.

The Consumer Price Index (CPI), the country's primary gauge of inflation, increased 1.2% from a year earlier in May.

Although energy costs have risen sharply, their impact on consumer prices has remained relatively limited, following several years of stagnant inflation.

The CPI increased 0.2% in January before reaching a three-year high of 1.3% in February. Consumer inflation then eased slightly to 1% in March, followed by a 1.2% rise in April and the same rate in May.

China’s consumer prices have largely remained subdued since 2023. Inflation rose just 0.2% in both 2023 and 2024, while consumer prices were unchanged throughout 2025, underscoring the modest pace of price growth despite recent gains.

MENAFN11062026000045017169ID1111243801