{"id":128172,"date":"2021-06-09T10:53:26","date_gmt":"2021-06-09T10:53:26","guid":{"rendered":"https:\/\/precoinnews.com\/?p=128172"},"modified":"2021-06-09T10:53:26","modified_gmt":"2021-06-09T10:53:26","slug":"strategist-hot-inflation-consistent-with-reopening-challenges","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/strategist-hot-inflation-consistent-with-reopening-challenges\/","title":{"rendered":"Strategist: Hot inflation consistent with reopening challenges"},"content":{"rendered":"
Hong Kong (CNN Business)<\/cite>China is getting pummeled by rising costs that have pushed producer price inflation to its highest level in nearly 13 years.<\/p>\n Surging inflation in the world’s factory threatens to spill over into the rest of the globe and drive prices that were already ballooning even higher. But economists also say the pressure could begin to ease soon. High producer inflation is troubling news for China’s businesses and the country’s ongoing economic recovery from the pandemic. It means that the rising costs of raw materials are now more aggressively cutting into company profits, and could <\/strong>force <\/strong>them to control costs by slowing down production or even shedding workers. That would hurt growth in the world’s second biggest economy.<\/p>\n “The rising cost pressures on manufacturers, together with the bumpy recovery of downstream demand, pose downside risks to [economic] growth,” Citi analysts wrote in a Wednesday researcher note. They added that small and medium-sized businesses have been particularly hit hard by the surging costs of raw materials. <\/p>\n
\nThe country’s producer price index \u2014 which measures the cost of goods sold to businesses <\/strong>\u2014 soared <\/strong>9% in May from a year ago, according to government data released Wednesday. That is the fastest increase since September 2008, when China was grappling with the consequences of an overheating economy after several years of annual GDP growth of more than 10%.<\/p>\n<\/ul>\n
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