Key facts
- China's producer price index (PPI) rose 4.1% year-on-year in June.
- This is the highest producer inflation rate since July 2022.
- Consumer prices (CPI) rose 1.0% year-on-year in June.
- Producer prices increased month-on-month by 0.3% in June.
- Consumer prices decreased month-on-month by 0.3% in June.
China's producer price inflation surged in June, reaching its highest level since July 2022, as cost pressures remained elevated for domestic manufacturers. The producer price index (PPI) rose 4.1% year-on-year, matching forecasts and accelerating from a 3.9% increase in May.
On a monthly basis, the PPI dropped 0.3% in June. Meanwhile, consumer prices continued to climb, with the consumer price index (CPI) increasing 1.0% from the same month last year, a slight deceleration from May's 1.2% gain. Economists had expected a 1.1% CPI increase. The CPI edged down 0.3% month-on-month, compared to an expected 0.2% drop and a 0.1% dip in May.
Data from previous months indicated that soaring global commodity and energy prices, partly driven by supply disruptions, contributed to the rise in factory-gate prices. Domestic policy efforts to curb intense price competition among factories also played a role in lifting producer prices. While producer prices are climbing faster than consumer prices, factories are currently absorbing some of the higher input costs, leading to thinner margins.