China saw its fastest rise in the producer price index (PPI) amid ongoing concerns over energy costs linked to Middle East tensions stemming from the energy shock triggered by the US and Israel’s war with Iran.
Rising oil costs have fueled existing inflation concerns across the US, Europe and Japan, while contributing to expectations that cost-driven pressures could reverse price dynamics in China, where a deflationary process has been in effect.
China’s PPI climbed 2.8% year over year in April, the National Bureau of Statistics (NBS) reported.
The index, calculated based on factory-gate prices of manufactured goods, saw a 0.5% rise in March for the first time after a 41-month decline beginning in the fourth quarter of 2022.
China’s PPI fell 3% in 2023, 2.2% in 2024 and 2.6% in 2025, while it fell 1.4% and 0.9% this year in January and February, respectively.
In April, the country’s PPI rose 2.8%, its fastest increase since July 2022, while the index had risen 0.5% in March.
Arjen van Dijkhuizen, senior economist at the Dutch bank ABN AMRO, told Anadolu that China’s April consumer inflation gained momentum in line with estimates amid rising energy prices, but it still remains weak for now due to imbalances in domestic demand.
“The Iran conflict is most visible in producer price inflation, which jumped to a post-pandemic high,” he said.
Lynn Song, chief Greater China economist at ING Group, told Anadolu that the high cost pressures in the country “will eventually translate into more inflation across the economy.”
“While the short-term impact is likely to be negative as prices rise, in the longer term it may be a positive development as China had previously been dealing with deflation pressures,” he said, expecting the situation to affect both China’s domestic and export prices.
“Restoring healthy inflation expectations could actually encourage more investment and consumption in the upcoming years,” he added.