It is possible that rising producer prices in China will also reinforce rising consumer prices globally.
Producer prices inflation in China has risen higher than at any time in the last 12 years, according to Reuters. Producer price means the price a company receives for a commodity.
For the time being, there is no significant increase in Chinese consumer prices, ie the prices paid by consumers for their products.
However, it is possible that the rise in Chinese producer prices will also reinforce the rise in consumer prices both in China and globally.
In total, China’s producer price index rose by nine percent in May, according to Statistics China. The increase is largely due to higher prices for crude oil, iron ore and other metals.
Phenomenon has, according to Reuters, raised concerns among investors about strong stimulus measures aimed at minimizing the economic damage caused by the coronavirus pandemic, for example in the United States and the EU.
According to investors, a strong recovery could overburden the global economy too much, which could also significantly increase consumer price inflation, leading to higher prices paid by consumers.
Inflation, in turn, could lead central banks to tighten monetary policy, which would curb the recovery, contrary to stimulus measures.
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source https://pledgetimes.com/2021/06/china-producer-price-inflation-rose-to-12-year-high-in-china-investors-fear-economic-overload/
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