BEIJING (Reuters) – China’s factory-gate inflation rose more slowly than expected in December as the government took steps to contain lofty raw material prices, official data showed on Wednesday.

The producer price index (PPI) climbed 10.3% from a year earlier, the National Bureau of Statistics (NBS) said in a statement. Economists in a Reuters poll had expected the PPI index to gain 11.1% after a 12.9% rise in November.

Factory inflation has moderated from record highs in recent weeks as Beijing intervened to stabilise high raw material prices and ease an energy power crunch.

The softer inflation also leaves the door open for more monetary easing as the world’s second-largest economy slows and faces a series of headwinds in 2022, including property woes, a slowing manufacturing sector and COVID-19 outbreaks.

China’s consumer price index (CPI) grew 1.5% year-on-year in December. Economists in a Reuters poll had expected a 1.8% uptick, after a 2.3% increase in November.

The CPI rose 0.9% year-on-year in 2021, down from a 2.5% gain in 2020.

Measures to contain COVID-19 outbreaks are also likely to weigh on the economic outlook as the world battles the Omicron coronavirus variant.

Chinese cities are already advising people to stay put for the Lunar New Year, a peak travel period, due to fresh coronavirus outbreaks in several places, such as the central Henan province and northern Tianjin city.

(Reporting by Liangping Gao and Gabriel Crossley; Editing by Shri Navaratnam and Ana Nicolaci da Costa)