(NBS) China posted a producer price index of 8.8% in February, an eight-month low, easing from a 9.1% increase in January.
The decline in factory prices happened amid the closure of many Chinese factories for the Lunar New Year during the first half of February.
The falling producer prices are also connected to moves by Beijing to ease policy and a range of crackdowns to tame the rising costs. The policy focus also saw the consumer prices rise by 0.9% in February, unchanged from the January gain.
Despite the easing prices, analysts expect prices to shoot up due to the rising costs of global commodities such as oil.
Goldman Sachs analysts say China’s PPI will remain elevated in the near term due to the escalating geopolitical tensions that have seen the prices of critical metals and commodities soar.
Bruce Pang, Head of Macro and Strategy Research at China Renaissance Securities, also warned that the moves by Beijing to ease policy might not be effective in the wake of the geopolitical tensions.
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