(BSS/AFP) - China`s producer prices rose sharply in September even as consumer inflation remained subdued, official data showed Wednesday, as conflict in the Middle East continued to push up oil prices and squeeze supply.

Prices paid at the factory gate jumped 5.0 percent year-on-year last month, according to the National Bureau of Statistics, the fastest pace since summer 2022 and above the 4.4 percent forecast in a Bloomberg survey of economists.

The pace was much faster than the 3.8 percent recorded in August.

After three years of falling prices, China`s producer price index has accelerated since March, as the Iran war sends the price of oil soaring and strangles shipping through the vital Strait of Hormuz, further pushing up commodity costs.

"Electronics prices also rose rapidly on the back of the global AI boom and memory chip shortages," according to Nguyen Hoang Nam, China economist at Capital Economics.

"But prices in other consumer-goods categories were still falling, suggesting that weak domestic demand continued to weigh on underlying price pressures," Nguyen wrote in a note.

Weak domestic demand has been a persistent drag on the world`s second-largest economy, despite officials` attempts to boost consumer spending.

The consumer price index edged up 0.9 percent in September, more than the 0.8 percent recorded in August but below the 1.0 percent rise forecast in the Bloomberg survey.

The CPI has remained below the official two percent target for more than three years, slipping into negative territory several times during that period.

With consumption weak, China has relied on surging exports to reach its annual economic growth target of between 4.5 and 5.0 percent.

Growth slipped to 4.3 percent in the second quarter, and on Tuesday the International Monetary Fund lowered its forecast for 2026 to 4.5 percent.