China's producer, consumer prices rise in April on Middle East war energy shock

In China, the rise in producer and consumer prices continued in April due to the surge in global energy and raw material prices triggered by the war in the Middle East. The National Bureau of Statistics of China (NBS) reported on Monday that the producer price index rose by 2.8% year-on-year in April. The impact of rising global energy and raw material prices on producer prices became more pronounced in April compared to the previous month.

End of deflationary trend

The index recorded its first increase of 0.5% in March after a 41-month decline that began in the fourth quarter of 2022. The index fell by 3% in 2023, 2.2% in 2024, and 2.6% in 2025, while also declining by 1.4% in January and 0.9% in February of this year.

Consumer prices

The consumer price index, the key indicator of inflation, recorded a 1.2% increase in April compared to the same month last year. Consumer prices rose by 1.3% year-over-year in February to reach their highest level in three years before increasing by 1% in March.

Stagnation period

Chinese consumer prices entered a period of stagnation starting in 2023. Inflation rose by only 0.2% in both 2023 and 2024 and remained flat in 2025. The Chinese government lowered its annual inflation target from 3% to 2% last year due to ongoing stagnation.

Conflict context

The Middle East war began when the US and Israel launched strikes against Iran on Feb. 28, triggering disruptions in the Strait of Hormuz and a surge in global energy prices. A ceasefire brokered by Pakistan took effect in April but has not yet produced a lasting agreement.