(Yicai) June 10 -- China’s consumer price growth was unchanged in May from the previous month, while producer prices climbed by the fastest pace in nearly four years, as surging energy costs worked their way through the economy.

The consumer price index, a key inflation gauge, rose 1.2 percent last month from a year earlier, matching April’s increase, according to data released by the National Bureau of Statistics today. Chief economists surveyed by Yicai had predicted a 1.3 percent increase.

On a monthly basis, the CPI edged 0.1 percent lower after a 0.3 percent increase in April. The core CPI, which excludes food and energy prices, climbed 1.1 percent year on year, 0.1 percentage point less than April’s gain.

Prices of consumer industrial goods jumped 3.9 percent last month, a gain of 0.4 point from April, the NBS said. Gasoline prices soared 23.5 percent, up from April’s 19.3 percent. Food prices tumbled 1.7 percent, 0.1 point more than in the previous month, with pork down 16.1 percent, compared with a 15.2 percent drop in April.

May’s CPI stayed in a moderate range, food and non-food prices moved in different directions, Pang Ming, senior researcher at the National Institution for Finance and Development, told Yicai. Food prices were soft because supplies were abundant and seasonal effects weighed on demand, while non-food prices were supported by stronger demand for industrial consumer goods and services, making them a key contributor to CPI growth.

The producer price index, which measures factory gate prices, rose for the third month in a row, climbing 3.9 percent from a year ago, the fastest pace since July 2022, the NBS data also showed. Chief economists had forecast a 3.6 percent increase. On a monthly basis, the PPI inched up 0.5 percent, slowing 1.2 point from April’s gain.

The PPI only returned to growth in March after being in negative territory every month since October 2022. It gained 2.8 percent in April and 0.5 percent in March.

Geopolitical tensions have pushed up energy prices, putting the PPI on an upward trajectory, China Galaxy Securities said in a research report. Because current price rises are largely driven by higher costs, upstream profits should improve, while margins in midstream and downstream manufacturing will likely remain under pressure, it said.

Looking ahead, Pang said imported inflationary pressures are already easing. As a result, CPI growth may slow this month from a year ago, while monthly PPI growth could also soften. Prices are expected to remain at a broadly moderate level this month, he added.

Editors: Dou Shicong, Kim Taylor