Producer prices in China rise at fastest pace since June 2022, beating expectations

Business News and FinanceVIEW IN APPMarketsBusinessInvestingTechPoliticsSelectMake ItAsia EconomyProducer prices in China rise at fastest pace since June 2022, beating expectationsPublished Tue, Oct 13 2026 9:43 PM EDTUpdated 26 Min AgoLim Hui Jie@in/hui-jie-lim-a7371176/WATCH LIVEKEY POINTS China's PPI rose 5% year on year in September, sharply up from August's 3.8% and beating the 4.5% rise expected.CPI rose 0.9%, up from 0.8% in August, but missing the 1% expected by economists. Analysts said that the Chinese economy appears to be moving away from inflationary pressures, although domestic demand is still weak. Citizens are shopping at a supermarket in Nanjing, East China's Jiangsu province, on March 9, 2024. Costfoto | Nurphoto | Getty ImagesChina's producer price index climbed at its fastest pace in over four years, rising 5% in September as higher fuel prices pushed up costs for businesses.

The increase was higher than the 4.5% expected by economists polled by Reuters, and sharply up from the 3.8% seen in the previous month.

China's National Bureau of Statistics said higher prices were also seen in the country's coal sector, due to increased demand for coal for winter heating, temporary tight supply in major coal-producing areas, and expectations of rising international coal prices.

Consumer prices saw a 0.9% rise, marginally missing expectations of 1%, but up from 0.8% in the month before.

The increase in the consumer inflation rate was due to gasoline prices, which climbed 16.6% and contributed approximately 0.47 percentage points to the year-on-year CPI increase, according to Dong Lijuan, chief statistician of the Urban Division at the NBS.

This was partially offset by a wider fall in food prices, which declined 1.7% and pulled down the CPI by 0.29 percentage points, Dong added.

The core CPI rate, which excludes volatile food and energy prices, climbed 1%.

The lower-than-expected CPI reading indicates that domestic demand remains "lackluster," according to Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, in a note after the data release.

However, the higher PPI is pointing to an economy that is gradually moving away from deflationary pressures even if the recovery remains uneven, said Hao Zhou, chief economist at Guotai Junan International Holdings.

His view was that domestic demand was recovering more gradually than the industrial sector, although the fact that consumer inflation has remained in positive territory indicated at the deflationary environment in 2024 and 2025 "is continuing to fade."

The higher inflation figures come as China's economy grapples with its lowest growth rate in more than three years. GDP growth for the second quarter of the year missed expectations at 4.3%.

While economic data for August showed that retail sales expanded more slowly than expected, industrial output beat expectations.

On Sept 28, a State Council readout signaled that more policy support could be on the way for the Chinese economy, saying that "In response to emerging challenges in the economy's operation, efforts should be made to intensify counter-cyclical adjustment of macro policies."

Lynn Song, chief economist for Greater China at ING, wrote that "It marks a bit of a shift in tone," adding that more policy support rollouts will be coming so as to reach both short- and long-term growth targets.

"These include the 4.5%-5.0% GDP growth target for 2026, and the longstanding goal to double GDP from 2020 to 2035."