In October, China’s industrial cost inflation reached its highest level in 26 years, a consequence of new outbreaks of Covid-19 and rising food and energy prices, according to official figures released this Wednesday (10) .
The Producer Price Index (IPP) rose for four consecutive months, putting pressure on authorities to take action to rein in the rise as the country struggles to spur economic recovery.
The IPP, which measures the cost of goods as they leave the factory, rose 13.5% year-on-year in October, according to the National Bureau of Statistics (ONE).
“The increase in the IPP was driven by a combination of external factors and local shortages of energy and raw materials,” said ONE’s chief statistician, Dong Lijuan.
This includes a sharp rise in local coal prices, the rise in the global cost of oil and gas, as well as supply chain disruptions, explained Rajiv Biswas of IHS Markit.
Another recent factor, he added, was the increase in shipping costs around the world “due to the strong resumption of trade flows” between China, the United States and Europe.
The IPP rose 10.7% in September, which was the most significant increase registered by the ONE since the mid-1990s.
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