China's producer price index advanced in May to 3.9% year-on-year, above the 2.8% increase recorded in April. This rebound represents the largest increase in factory gate prices in the world's second-largest economy since July 2022, according to data released by the National Bureau of Statistics.
With this figure, industrial inflation has now advanced for three consecutive months, after having remained in negative territory for 41 consecutive months. This new upward trend coincides in time with the months of conflict in the Middle East.
The Chinese statistical office explained that the increase in industrial prices was mainly supported by the rise in energy costs, as well as by "the deep integration of AI in various fields and the increase in demand for computing power," factors that drove up quotations for non-ferrous metals, electrical machinery, and IT-related industries.
In parallel, China's consumer price index (CPI) recorded a year-on-year increase of 1.2% in May, the same pace as observed in the previous month. For its part, core inflation, which excludes the volatility of energy and fresh food, remained at 1.1% year-on-year.