Barclays' review of government data published Monday shows China's April inflation readings overshot expectations, with energy-related price moves playing a leading role.
On the consumer side, headline consumer price inflation climbed to 1.2% year-on-year in April, up from 1.0% in March and above the Bloomberg consensus of 0.9%. Producer price inflation registered a markedly larger increase, rising to 2.8% year-on-year in April from 0.5% in March. That producer reading was well ahead of market expectations of 1.8% and above Barclays' own forecast of 1.2%.
Measured month-on-month, producer prices jumped 1.7% in April - the strongest monthly advance since the COVID-19 pandemic period - compared with a 1.0% monthly rise in March. Barclays points to delayed pass-through from earlier oil price gains as a key factor behind the jump in producer prices, even though oil price increases slowed in April compared with March.
The rebound in producer prices was concentrated in upstream segments of the economy. Raw materials prices increased 7.1% year-on-year in April versus 1.1% in March, while prices in the mining sector rose 10.6% from 2.0%. Producer prices for oil and gas extraction surged to 29% year-on-year - the strongest pace since late 2022. Coal mining prices also returned to positive year-on-year territory for the first time since mid-2024.
By contrast, downstream sectors displayed much softer price dynamics. Consumer goods prices fell 1.0% year-on-year in April, and manufacturing sector prices increased by only 1.5% year-on-year. Barclays notes that this pattern indicates firms have so far struggled to fully pass higher input costs through the value chain to end customers.
Barclays estimated that energy accounted for roughly 0.5 percentage points of the headline consumer price inflation in April. At the same time, overall headline inflation rose by only 0.2 percentage points, which suggests that underlying inflation excluding energy components actually eased in April.
Several major components of consumer prices moved lower or remained subdued. Housing rents were negative 0.6% year-on-year in April versus negative 0.5% in March. Automobiles were negative 1.2% year-on-year versus negative 1.1% in March. Household goods and services were at 1.4% year-on-year in April versus 1.5% in March. Core consumer price inflation held in a tight range - about 1.1% to 1.2% in March and April - below the 1.3% average recorded in January and February. Services inflation was broadly flat at around 0.8% to 0.9%, slightly under its pre-conflict average of 0.9%.
Overall, Barclays' analysis highlights a divergence between energy- and upstream-driven inflationary impulses and softer downstream and core price measures. The data point to stronger input-cost pressures at the production level while end-user price growth remains restrained.