China’s consumer price inflation rose sharply for a second month in a row in April to a 17-month high, but producer prices eased for another month as Covid-related lockdowns and movement controls played havoc with consumer spending as well as manufacturing and distribution.
The country’s National Bureau of Statistics said the annual CPI rate rose to 2.1%, up from 1.5% in March and 0.9% in February, meaning the annual rate has more than doubled in two months and is now the highest annual rate since October, 2020
Food prices rose for the first time in five months as the Covid controls shut the door on the movement and sales of fresh food and grocery items across much of the country, including Shanghai and much of Beijing – which contain more than 47 million people alone.
The annual rate was well above the forecast rise of 1.8% and saw a 0.4% rise month on month after a flat reading in March from February.
China’s producer price inflation eased to a 12-month low of 8.0% in April 2022 from 8.3% in March but above market estimates of 7.7%.
That meant April was the 16th straight monthly increase in producer prices and highlights the difficulty government is having with reducing this figure, complicated by the impact of the Covid control measures, which have intensified in parts of the country in May.
On a monthly basis, producer prices increased by 0.6% in March, after a 1.1% gain in March. For the first four months of the year, China’s PPIs grew by an annual 8.5%.
When added to this week’s weak trade data, the inflation report for April is not encouraging. The production, investment and retail sales figures for April are out on Monday and will confirm the economy is not healthy and drifting downwards.