China’s inflationary pressures have continued to grow in May, as shocks from low supply have sharply increased food costs. Inflation, as expected by analysts, was 2.7% YoY, according to the National Statistics Office. In April, growth was 2.5%. Above all, the appreciation of food prices has contributed.

Producer prices in the People’s Republic grew in May by 0.6% on an annual basis, as were analysts’ expectations. In April they jumped by 0.9% compared to the previous year.

On the other hand, Chinese pork prices grew by 18.2% compared to the previous year, vegetables grew by 13.3% and fruit – by 26.7%. Data from the statistical office also show that consumer prices are unchanged from April, indicating a stabilization of inflationary pressures

Food prices rose by 7.7% from the previous year, contributing to 1.48 percentage points of CPI growth, according to the National Statistics.

According to the analysts, the fruit and egg price increases are short-lived and may go away in the summer when supply increases, although pork prices could rise even more because of African swine fever.

They expect the CPI to reach the 3% annual limit in some months this year, but that may put some pressure on Central Bank prejudices. There will be no monetary policy adjustments, and general inflation will not be a big problem this year, as core inflation remains stable and output prices will be at low levels.