China’s wholesale prices rose at the fastest pace in nearly four years in May, driven by surging raw material costs from the Iran war and an artificial intelligence investment boom, while consumer inflation came in below estimates.

The producer price index jumped 3.9% from a year ago, the highest since July 2022, topping economists’ forecast of 3.8%, and outpacing 2.8% in April, according to data released by the National Bureau of Statistics on Wednesday.

Wholesale prices returned to growth in March as the input cost surge stemming from the Middle East conflict lifted the economy out of its longest deflationary streak in decades.

PPI has been boosted by a surge in global commodity prices, as the Iran war has throttled traffic through the Strait of Hormuz, disrupting energy and raw material flows.

Aside from higher commodity costs, wholesale prices were also buoyed by the growing demand for artificial intelligence computing power, pushing up prices for tech equipment and semiconductors.

Consumer prices rose 1.2% in May from a year earlier, missing economists’ estimates of 1.3% growth in a Reuters poll. On a month-on-month basis, the consumer inflation dropped 0.1% from April.