Chinese consumer prices climbed 2.5% year-over-year in May.
This modestly beat expectations for a 2.4% rise and compares with a 1.8% rise in April.
Meanwhile, producer prices fell 1.4% YoY. This was slightly less than expectations for a 1.5% fall, and compares to a 2% fall the previous month.
Ahead of the release, Jian Chang and Serena Zhou at Barclays wrote that CPI will likely be driven higher by rising food, especially pork prices.
“We think the turnaround in pork prices is mostly attributable to the government’s efforts to reverse the decline in prices in this sector,” they write. “But we do not expect this to pose a significant risk to our 2014 CPI inflation forecast of 2.4%.”
Here’s a look at the recent drop in sow stock and the rise in prices: