China's factory gate prices climbed at an elevated rate in July, steered by higher prices in crude oil and coal, data released Monday showed.
The country's July factory gate inflation was up at a faster rate compared to the previous month and surpassed market estimates, adding to pressure on an economy struggling to regain recovery momentum as companies grapple with increasing costs in raw materials and the persistent threat brought about by the coronavirus.
China's producer price index soared nearly 10% last month from a year earlier, and from an increase of almost 9% in June, the National Bureau of Statistics said Monday.
PPI reflects the prices factories charge wholesalers for their products. A survey of economists' estimates by The Wall Street Journal shows an 8.8% increase. In a Reuters survey, analysts had expected the PPI to climb 8.8%.
The price increase in July matched economic figures registered in May, which was the biggest increase in producer prices since September 2008, Market Watch said.
China has, in recent months, carried out new efforts to ease rising prices of commodities, restricting steel exports and clamping down on commodity speculation.
"The price increase of industrial products expanded slightly in July as prices of crude oil, coal and related products were up sharply," senior NBS economist Dong Lijuan said in quotes by the South China Morning Post.
The world's second-largest economy is steadily on course to grow more than 8% for 2021 but market observers say pent-up pandemic demand has peaked and project growth to be moderate in the face of supply chain bottlenecks and new infection rates caused by the COVID-19 Delta variant.
According to Xing Zhaopeng, senior China planner at Australia & New Zealand Banking Group, as the outbreak unfolds, the country's local demand will slow down and the economy's over-inflation strains will drop.
In a note, analysts from Nomura wrote they believe that local inflationary pressure is largely manageable, and China will unlikely overreact to the stronger-than-projected July inflation figures.
Meanwhile, China's official consumer price index was up by 1% in July from a year earlier, retreating from 1.1% in June, data by NBS showed.
