People’s Bank of China’s Yi says producer price inflation will slow at end of 2021

BEIJING. People’s Bank of China Governor Yi Gang predicted producer price inflation will start slowing by the end of this year after accelerating at the fastest pace in almost 26 years in September.

The producer price index will “remain high for a few months, before the upward pressure wanes at the end of this year,” Yi said. “Consumer price index growth remains moderate.” The index climbed 10.7 per cent from a year earlier, beating forecasts and reaching the highest since November 1995, data showed last week. Yi said the advance was “largely explained” by rising raw material costs.

Yi said the pandemic is “under control” in China and the economy is returning to “business as usual” albeit with its growth easing lately with one reason being higher default risk for some firms due to “mismanagement and breakneck expansion.”