China inflation: fuel and food prices to push up consumer costs amid Covid-19 outbreak, Ukraine war

China’s official consumer price index (CPI) rose by 1.5 per cent in March from a year earlier, up from 0.9 per cent growth in February

China’s producer price index (PPI) rose by 8.3 per cent in March, down from a rise of 8.8 per cent in February

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China’s producer price index (PPI) rose by 8.3 per cent in March, down from a rise of 8.8 per cent in February. Photo: AFP

Published: 9:36am, 11 Apr 2022Updated: 4:17pm, 11 Apr 2022

China’s headline consumer inflation may continue its steady increase in the coming months amid the disruption to economic activities caused by the ongoing coronavirus outbreaks and rising commodities prices due to the protracted Ukraine war.

The official consumer price index (CPI) slightly beat expectations by rising to a three-month high of 1.5 per cent in March from a year earlier, up from a rise of 0.9 per cent in February, data released on Monday showed.

Consumer inflation may rise further to above 2 per cent in April “as households across China have been stocking up food and other necessities after observing the fallout from the Shanghai lockdown”, Nomura analysts led by Lu Ting said.

“Looking further ahead, due to lockdowns and transport disruptions in Northeast China, the largest grain production base in China, this year’s spring planting of crops may have been delayed and the risk of food shortage may rise in the second half of this year, adding further pressure to the worsening global food shortage caused by the ongoing military conflict in Ukraine.”

Food prices fell by 1.5 per cent from a year earlier in March, narrowing from a fall of 3.9 per cent in February, while non-food prices rose by 2.2 per cent last month, year on year, up from a reading of 2.1 per cent growth in February.