China Sees Continued Rise in Producer Prices Amid Global Energy Shock

(MENAFN) China has recorded a continued increase in producer prices in May, driven by higher global energy and raw material costs linked to ongoing geopolitical tensions involving the US, Israel, and Iran, according to official data.

Reports based on figures from China’s National Bureau of Statistics (NBS) show that the Producer Price Index (PPI) rose by 3.9% year-on-year in May.

The PPI, which tracks factory-gate prices of manufactured goods, had previously fallen by 1.4% in January and 0.9% in February. It then rebounded with a 0.5% increase in March, followed by a sharper 2.8% rise in April as the effects of Middle East instability began to feed into global markets.

This marks a continuation of a shift following a prolonged period of deflationary pressure. The index had declined for several consecutive years, including drops of 3% in 2023, 2.2% in 2024, and 2.6% in 2025.

Consumer inflation also showed moderate movement. The Consumer Price Index (CPI), a key measure of inflation, increased by 1.2% in May compared with the same month last year.

Energy price increases have contributed to a modest rise in consumer costs after several years of relatively weak inflation. The CPI rose by 0.2% in January, reached 1.3% in February, and then recorded gains of 1% in March and 1.2% in April.

China’s consumer prices had previously remained largely stagnant, with inflation levels of just 0.2% in both 2023 and 2024, and flat conditions continuing into 2025, according to reports.

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