China's producer inflation rate hit a more than 12-year high in May

Reuters reports that China's factory gate prices rose at their fastest annual pace in over 12 years in May, driven by surging commodity prices, highlighting global inflation pressures at a time when policymakers are trying to revitalise COVID-hit growth.

China's producer price index (PPI) increased 9.0%, as prices bounced back from last year's pandemic lows. The PPI rise was driven by significant price increases in crude oil, iron ore and non-ferrous metals, the NBS said. Analysts had expected the PPI to rise 8.5% after a 6.8% increase in April.

On a monthly basis, the PPI rose 1.6%, up from a 0.9% uptick in April.

Prices for commodities including coal, steel, iron ore and copper, which affect the PPI, have surged this year, fuelled by post-lockdown recoveries in demand and ample global liquidity.

NBS data also showed China's consumer price index (CPI) rose 1.3% in May in annual terms, up from a 0.9% gain in April but lower than the 1.6% forecast.

Food inflation rose 0.3% in May from a year earlier on higher prices for freshwater fish and eggs, despite still falling pork prices. That compared with a 0.7% drop in food prices in April.

Non-food prices, including airfares, gasoline and diesel prices, accelerated to 5.5%, likely bolstered by China's Labour Day Holiday at the start of May.