Data released by China’s National Bureau of Statistics on Monday, May 11, showed that the annual Consumer Price Index (CPI), a key measure of inflation, rose to 1.2% year-on-year in April, up from 1.0% in March. This exceeded market expectations of 0.9% growth, as the impact of the energy sector shock stemming from the Strait of Hormuz blockade spread to several industrial sectors. Meanwhile, the Producer Price Index (PPI) registered a positive reading for the second consecutive month since 2022.

The core CPI, which excludes volatile food and energy prices, also rose to 1.2%, compared to a 1.1% increase in March.

Gasoline prices were the main driver of inflation, rising 19.3% year-on-year in April, while food prices fell by 1.6%.

Meanwhile, China’s Producer Price Index (PPI) rose into positive territory for the second time since 2022, ending a 41-month deflationary streak, growing 2.8% year-on-year in April compared to a 0.5% increase in March, while forecasts had indicated growth of 1.7%, its highest level since July 2022.