China’s producer price inflation beat expectations and accelerated to its fastest pace in nearly nine years in February. Data released by the National Bureau of Statistics showed Thursday that China’s producer price inflation spiked 7.8 percent in February from a year earlier, compared with a 6.9 percent increase in January and beating analysts’ forecasts at 7.7 percent.
Gains in the PPI were driven largely by mining and heavy industry, with a 36.1 percent leap in mining, the biggest jump in that category since early 2010. Policymakers are unlikely to be concerned about the high rate of producer price inflation as there has been little evidence of it flowing through to consumers yet.
China’s consumer inflation rate slowed to 0.8 percent in February from a year earlier. CPI fell short of expectations for a rise 1.7 percent and compared to 2.5 percent acceleration in January. The statistics bureau attributed the slowdown in consumer inflation to the Lunar New Year and cold weather.
Food prices fell 4.3 percent, reversing a 2.7 percent rise in January. At the same time, non-food prices inflation slowed moderately to 2.2 percent from 2.5 percent. Month-on-month, consumer prices fell 0.2 percent, the first fall in four months, and followed a 1 percent rise in January.