China’s National Bureau of Statistics (NBS) has downplayed worries that the world’s second-largest economy is at risk of stagflation, describing the recent rise in factory-gate prices as a temporary phenomenon caused by short-term complications that are slowly being dealt with, reports Caixin.
Rising global commodity prices and domestic supply shortages of some energy and raw materials are the main reasons for the jump in producer-price inflation that’s affected China this year, said Fu Linghui, a spokesman for the NBS. The increase in commodity prices has led to higher costs for some businesses, he added.
“The market’s efforts to maintain supply and stabilize prices are increasing and the tight supply of some energy products is gradually improving. This is all conducive to stable economic growth,” he said in response to a question about how the government can tackle the risks posed by stagflation, a term that refers to a situation where an economy simultaneously experiences stagnant economic growth and accelerating inflation.