China’s consumer inflation accelerated in August while factory-gate prices rose at a faster pace, signalling strengthening price pressures in the world’s second-largest economy.
China’s consumer price index (CPI), the main gauge of inflation, rose 0.8% year-on-year in August, according to the latest official data released on Wednesday.
The producer price index (PPI), which measures prices for goods at the factory gate, meanwhile, increased 3.8% year-on-year, according to China’s National Bureau of Statistics (NBS).
The August figures mark an acceleration from July, when consumer prices increased 0.5% year-on-year and PPI rose 3.5%.
China’s consumer inflation had stood at 1.0% in June before moderating to 0.5% in July, meaning the August reading represents a partial rebound in price growth.
The latest PPI reading also extends the turnaround in factory-gate prices, with the 3.8% August increase following July’s 3.5% gain.
In July, higher producer prices had been driven mainly by the means of production, where prices increased 4.8% year-on-year. Mining and quarrying prices surged 16.4%, while raw material and processing industry prices increased 6.1% and 3.1%, respectively. Consumer-goods producer prices, however, were still 0.8% lower.
The stronger August PPI suggests cost pressures further upstream in China’s industrial economy continued to build, although the extent to which these increases are being passed through to consumers remains comparatively limited.
China has experienced relatively subdued consumer inflation in recent years amid cautious household spending and persistent pressures in parts of the domestic economy. The widening gap between the August CPI increase of 0.8% and PPI growth of 3.8% therefore points to considerably stronger price pressures at the production level than at the consumer level.
In July, food prices had remained a drag on headline inflation, falling 1.5% year-on-year, while non-food prices increased 0.9%. Core CPI, excluding food and energy, rose 0.9%.
