China’s factory-gate prices snapped six months of year-on-year declines in January, although prolonged business closures from the coronavirus outbreak mean positive momentum is unlikely to persist, reported Reuters.
The virus has added to price pressures with consumer inflation hitting a more than 7-year high as government restrictions on movement drove residents to stock up on essentials. China’s producer price index rose 0.1% from a year earlier, according to data released by the National Bureau of Statistics on Monday, in line with expectations tipped by a Reuters poll of analysts and reversing a 0.5% drop in December.
Movement of goods and people has also been severely disrupted, with some firms including South Korea’s Hyundai Motor and Japan’s Nintendo expecting major disruptions in their supply chains.
This has prompted some economists to drastically lower their GDP growth estimates for the first quarter and the full year. Beijing is mulling slashing its 2020 growth target of around 6% and readying fiscal and monetary stimulus to counter the effects of the outbreak, policy sources have told Reuters.