© Reuters. FILE PHOTO: A worker wearing a face mask works on a production line manufacturing bicycle steel rim at a factory, as the country is hit by the novel coronavirus outbreak, in Hangzhou, Zhejiang province, China March 2, 2020. China Daily via REUTERS

BEIJING (Reuters) – China’s factory gate prices rose at the fastest rate in three and a half years during April, official data showed on Tuesday, as the world’s second-largest economy continued to gather momentum following record-setting growth in the January-March quarter.

The producer price index (PPI), a gauge of industrial profitability, rose 6.8% from a year earlier, the National Bureau of Statistics said in a statement, compared with a 6.5% rise tipped by a Reuters poll of analysts and a 4.4% rise in March.

China’s export growth beat market expectations in April while imports for the month hit a decade high, official data showed on Friday, underscoring robust economic activity for the world’s second-largest economy.

The country’s gross domestic product (GDP) expanded by a record 18.3% in annual terms in the first quarter as the country recovers from the devastating impact of COVID-19. Many economists expect China’s GDP growth to exceed 8% in 2021, although some warn that continuing global supply chain disruptions and higher comparison bases will sap some momentum in coming quarters.

The consumer price index (CPI) rose 0.9% in April from a year earlier, the statistics bureau said in a separate statement, compared with a 1.0% rise tipped by a Reuters poll of analysts and a 0.4% rise in March.

Despite rising pressure from imported global inflation, China’s full-year CPI is likely to be significantly below the official target of around 3%, deputy director at NBS Sheng Laiyun, said on Friday in an interview with Economics Daily.

Sheng attributed China’s likely muted inflation to currently slow core inflation, economic fundamentals where supply has outstripped demand, relatively restrained macropolicy support, recovering pork supply and a limited pass-through effect from PPI to CPI.

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