Rising inflation is beginning to grip the global economy, with China’s consumer price inflation figures swelling amid strings of supply-chain troubles.
The export giant’s factory gate prices grew at their fastest rate annually in more than 12 years last month – soaring 8.6 per cent higher than December’s figure.
China’s consumer price inflation for May grew by 0.9 per cent, taking the country’s CPI figures from minus 0.2 per cent to 1.3 per cent.
Last year’s tumbling commodity prices have played a part in the looming inflation but recent pandemic-induced supply chain disruptions have piled on the pressure.
The costs of recovery – for components, labour, and freight – have been weighed down during the pandemic, which has led to supply chains struggling to bounce back.
Post-pandemic recovery has also stoked the producer price inflation, as prices for commodities including coal, steel, iron ore and copper, which affect the index, soared this year.
Ballooning commodity prices, alongside last year’s low bases, could ramp up China’s inflation more in the second and third quarters, China’s central bank has said.