China's factory gate inflation hits 26-year high

FILE PHOTO: Birds fly over a closed steel factory where chimneys of another working factory are seen in the background, in Tangshan, Hebei province, China, February 27, 2016. REUTERS/Kim Kyung-Hoon/File Photo

BEIJING (Reuters) – China’s October factory gate prices rose at the fastest pace since 1995, beating forecasts and further squeezing profit margins for producers grappling with soaring coal prices and other commodity costs due to the power crunch.

The producer price index (PPI) climbed 13.5% from a yearearlier, faster than the 10.7% rise in September, the National Bureau of Statistics (NBS) said in a statement.

Analysts polled by Reuters had forecast PPI growth would quicken to 12.4%.

China’s consumer price index (CPI) grew 1.5% in October year-on-year, quickening from September’s 0.7% rise and beating the 1.4% gain tipped by the Reuters poll, according to NBS data.

Momentum is faltering in the world’s second-largest economy due to fresh curbs to control COVID-19 outbreaks, power shortages that have hit factories and a debt crisis in the real estate sector.

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