BEIJING, (Reuters) – China’s factory gate inflation increased more slowly in December than anticipated as the government attempted to limit high raw material prices. Official data was released Wednesday.

According to the National Bureau of Statistics, 10.3% of producer prices increased compared with a year ago. A Reuters poll showed that economists expected the PPI to rise 11.1% following a November 12.9% increase.

Inflation in factories has fallen from its record heights over the past few weeks, as Beijing intervened with high raw material prices to stabilize them and alleviate a energy power crunch.

Inflation is also more moderate, which opens the doors to additional monetary easing. The world’s second-largest economic slowdown will face a number of headwinds in 2022. This includes property woes as well as COVID-19 outbreaks.

China’s Consumer Price Index (CPI), grew 1.5% in December year-on-year. After a November 2.3% increase, economists polled by Reuters expected a 1.8% rise.

CPI increased 0.9% in 2021 compared with a 2.5% rise in 2020.

The economic outlook will be affected by measures to control COVID-19 as Omicron Coronavirus is being eradicated around the world.

Chinese cities advise people to avoid traveling during the Lunar New Year because there are coronavirus strains at several locations, including the northern Tianjin and central Henan provinces.