A worker wearing a face mask works on a production line manufacturing bicycle rim at a factory, as the country is hit by the novel coronavirus outbreak in Hangzhou, Zhejiang province, China March 2, 2020. China Daily via REUTERS - Photo
China's manufacturing price increase in May against their highest annual speed in over 12 years due to emerging global commodity prices and a low base of comparison, while consumer prices increasing for the third straight month but at a slower-than-expected rate.
The producer price index increased from a year earlier in a statement, based on significant price increases in crude oil, iron ore and non-ferrous metals. Analysts in a Reuters poll expected the PPI to rise 8.5% by April after a 6.8% increase in April.
The PPI risen 1.6% on a monthly basis, from a 0.9 increase in April.
The introduction of low currency prices and higher income levels last year could further catapult the price inflation of industry in the third quarter, Chinese central bank has said.
Prices of commodities including coal, steel, iron ore and copper, which affect the PPI, have been rising this year, driven by post-lockdown recoveries in demand and ample global liquidity.
Chinese policymakers have pledged to take measures to cool hot commodity prices and prevent them being passed onto consumers. Soaring producer prices have yet to feed into China's Consumer inflation, which remains moderate and well below the government's official target of around 3%. NBS data also shows that in May China's Consumer Price Index in general rose 1.3%, the biggest increase in eight months. This was still slower than analysts' projected for a 1.6% hike after a 0.9% increase in April.
China's economy has seen a strong rebound from a coronavirus-induced slump early last year.
China's gross domestic product increases by a record 18.3% in the first quarter and many economists expect growth to exceed 8% this year.