Last March, China emerged from more than three years of producer price deflation, thanks to rising energy prices resulting from ongoing geopolitical tensions.
China’s National Bureau of Statistics reported that producer prices rose 0.5% year-on-year in March, after falling 0.9% the previous month. This increase exceeded the expectations of analysts who predicted an increase of 0.4%.
On the other hand, consumer price inflation slowed significantly, reaching 1% compared to 1.3% in February. The core consumer price index (excluding food and energy) also fell to 1.1%.
This change comes after a period of contraction that began in late 2022, due to excessive manufacturing activity and weak domestic demand, which led to fierce price competition that negatively affected corporate profits and wage growth rates.
Economists believe that rising producer prices may help revitalize inflation in various economic sectors in the future.
