China producer prices rise 5% in September

China's producer prices rose 5.0% year-on-year in September, the National Bureau of Statistics said Wednesday, marking the fastest pace since summer 2022.

The factory-gate price rise was above the 4.4% forecast in a Bloomberg survey of economists and accelerated from 3.8% in August.

Producer prices have risen after three years of declines. AFP reported that higher oil prices linked to conflict in the Middle East and pressure on shipping through the Strait of Hormuz have pushed up commodity costs.

Nguyen Hoang Nam, China economist at Capital Economics, said electronics prices also rose on the back of the global AI boom and memory chip shortages. He said prices in other consumer-goods categories were still falling, suggesting weak domestic demand continued to weigh on underlying price pressures.

China's consumer price index rose 0.9% in September, up from 0.8% in August but below the 1.0% rise forecast in the Bloomberg survey. Consumer inflation has remained below the official 2% target for more than three years.

The International Monetary Fund on Tuesday lowered its 2026 China growth forecast to 4.5%. China's economy grew 4.3% in the second quarter, while officials have set an annual growth target of between 4.5% and 5.0%.