China Factory Prices Rise Faster Than Expected as Oil Surges
2022.04.11 06:01
China Factory Prices Rise Faster Than Expected as Oil Surges
(Bloomberg) — China’s factory gate prices rose more than expected in March as oil prices climbed, putting pressure on manufacturers that are already struggling to operate amid repeated Covid outbreaks.
The producer price index gained 8.3% from a year earlier, official data showed Monday, down from 8.8% in February and above the median estimate of an 8.1% increase in a Bloomberg survey of economists.
Consumer-price growth accelerated to 1.5% after staying unchanged at 0.9% for two months. The reading beat economists projection of a 1.4% increase.
China’s economic outlook worsened in March as cities and provinces locked down to control a ballooning Covid outbreak. Manufacturers in pandemic-stricken areas were forced to shutter their doors, or else keep workers on factory floors in so-called closed-loop systems so they could stay operational.
Businesses have said they faced difficulties buying raw materials, or faced extended delivery times due to supply chain disruptions. Restrictions also forced consumers to stay in their homes, as many struggled to secure daily necessities or paid high prices for goods.
The war in Ukraine also pushed global commodities including oil higher, clouding the outlook.
Price pressures are unlikely to constrain policy makers from stepping up support for economic growth, though. Unlike major developed economies, China’s central bank is in easing mode, having cut interest rates in recent months to boost liquidity and dialed up fiscal spending.
Authorities in recent weeks have made repeated vows to stabilize the economy as the Covid outbreak worsens, fanning speculation that a policy rate cut or other easing measure could happen soon.
©2022 Bloomberg L.P.
