China’s factory gate prices increased at the fastest rate in three and a half years in April, official data showed on Tuesday, as the world’s second-largest economy continued to gather momentum following record-setting growth in the first quarter.

The producer price index (PPI), a gauge of industrial profitability, rose 6.8 percent from a year earlier, the National Bureau of Statistics said, ahead of a 6.5 percent rise tipped by a Reuters poll of analysts and a 4.4 percent rise in March. The consumer price index (CPI), however, rose a modest 0.9 percent.

Investors globally are increasingly worried that pandemic-driven stimulus measures could sparkle a rapid rise in inflation and urge central banks to raise interest rates and take other tightening measures, potentially holding back economic recovery.

“Price surges have spread to mid-stream products, and will continue to affect mid-stream and downstream merchandise, driving an increase in costs for the whole society,” said Hu Yanhong, an analyst at Yingda Securities.

“It could become an obstacle to the economic advances.”

Chinese authorities have repeatedly said they will avoid sudden policy shifts that could derail the recovery, but are slowly normalising policy and clamping down on property speculation in particular.

The sharp jump in producer prices included an 85.8% surge in the oil and natural gas extraction sector from a year ago, while the melting and processing of ferrous metals rose 30%, said Dong Lijuan, senior NBS statistician in a statement accompanying the data release.

Still, PPI rose 0.9% in April from a month ago, easing from a 1.6% gain the previous month.

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 0.9% CPI increase in April from a year earlier was up on a 0.4% rise in March, driven mostly by gains in non-food prices. However, it missed analysts’ expectations for a 1.0% rise.

Food inflation remained weak. Prices dropped by 0.7% from a year earlier, unchanged from the previous month, weighed by falling pork prices.

Core inflation, which excludes volatile energy and food prices, rose 0.7% in April, up from 0.3% 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.