China’s central bank released a statement saying that inflation is “generally controllable” and factory-gate prices will level out with the recovery of global production and supply after the Covid-19 pandemic, reports Caixin. The statement looks to assuage fears of increasing consumer prices due to an upsurge in commodity costs.
“The rise in global commodity prices may boost China’s PPI (producer price index) in stages, but the risk of imported inflation is generally controllable.” said the People’s Bank of China (PBOC) in its first-quarter monetary policy implementation report on Tuesday. “As a large economy, the increase in international commodity prices is not, on its own, likely to trigger any obvious imported inflation in China as long as it is not accompanied by overheating domestic demand.”
The PBOC, in their report published on the same day as the biggest increase in factory gate prices in three and a half years, did note that inflation “may continue to rise moderately for a period of time” due to the forces driving price gains being “difficult to eliminate in the short term”.