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China Factory Inflation Hits 2022 High
(MENAFN) China’s producer inflation accelerated sharply in April, marking its fastest increase in nearly two years as soaring energy prices tied to Middle East tensions intensified concerns over global inflationary pressures.
The latest spike comes amid continued fallout from the energy shock linked to the US and Israel’s war with Iran, which has driven oil prices higher and added to inflation fears across major economies including the US, Europe and Japan.
Data released by the National Bureau of Statistics (NBS) showed China’s producer price index (PPI) rose 2.8% year over year in April. The increase represents the strongest gain since July 2022.
The PPI, which tracks factory-gate prices for manufactured goods, had already returned to growth in March with a 0.5% increase after enduring a 41-month decline that began in the fourth quarter of 2022.
China’s producer prices previously dropped 3% in 2023, followed by declines of 2.2% in 2024 and 2.6% in 2025. Earlier this year, the index also fell 1.4% in January and 0.9% in February before rebounding in March.
Rising crude oil prices have amplified speculation that China’s prolonged deflationary trend could begin reversing as cost pressures spread through the broader economy.
Arjen van Dijkhuizen, senior economist at Dutch bank ABN AMRO, told Anadolu that April inflation figures aligned with expectations as higher energy prices continued feeding into production costs, although weak domestic demand remains a limiting factor.
“The Iran conflict is most visible in producer price inflation, which jumped to a post-pandemic high,” he said.
Lynn Song, chief Greater China economist at ING Group, said mounting production costs are expected to gradually spread across the wider economy.
“While the short-term impact is likely to be negative as prices rise, in the longer term it may be a positive development as China had previously been dealing with deflation pressures,” he said, expecting the situation to affect both China’s domestic and export prices.
“Restoring healthy inflation expectations could actually encourage more investment and consumption in the upcoming years,” he added.
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