China inflation: increased demand as coronavirus restrictions ease could push up prices
- China’s consumer price index (CPI) rose by 2.1 per cent in May from a year earlier, unchanged from a rise of 2.1 per cent in April
- The producer price index (PPI), which reflects the prices that factories charge wholesalers for products, rose by 6.4 per cent in May, down from a rise of 8 per cent in April
Increased demand due to the easing of coronavirus restrictions could contribute to a rise in China’s consumer inflation later this year, analysts said, even after prices remained stable last month.
However, given the low price of pork a year ago, as well as firming demand due to the easing of coronavirus-related restrictions, analysts at Goldman Sachs have warned of a potential year-on-year increase in headline CPI.
“High-frequency data suggests that prices of pork and fresh fruits increased in early June,” Goldman Sachs said.
Food prices in China rose by 2.1 per cent from a year earlier in May, up from an increase of 1.9 per cent in April, while non-food prices rose by 2.3 per cent last month, year on year, up from a reading of 2.2 per cent growth in April.