(Bloomberg) -- China’s consumers, already weighed down by a property-market bust and a lackluster labor market, are now getting hit by the steepest jump in utility costs in recent memory.

At least 125 cities and counties announced gas-price rises of about 10% since June last year, according to estimates published last month by brokerage Haitong International Securities Group. Water and power prices also went up across the country, according to notices from authorities.

It’s not great timing. China’s retail sales just posted the slowest increase since the end of 2022, when Covid was raging in the wake of lifted pandemic controls. Demand for cars, clothing and shoes plummeted in April, data Friday showed.

Rising utility costs risk curbing spending on other services and goods. Adding to the pain, China State Railway Group in a rare step boosted fares for several popular high-speed routes by as much as 20% starting in June.

“It’s a big hit to sentiment,” said Zhaopeng Xing, senior China strategist at ANZ Bank China Co. in Shanghai. Households “have suffered a lot already from the sluggish income outlook so a living-cost increase” is yet another headwind, he said.

Local governments are pushing through the increases as the real estate crisis decimated land sales, one of their main revenue streams. They have limited options after running up a debt load of about $9 trillion. 

Liu Boyang, head of research at CNCB Hong Kong Investment Ltd., said “the main reason is to supplement the fiscal gap.”

While overall inflation in China is low — the headline consumer price index rose just 0.3% in April from a year before — the danger is higher utility costs could have a disproportionate impact on sentiment, because Chinese households have long enjoyed cheap rates thanks to significant state subsidies.

Paring Usage

In parts of Shanghai, residents brace for a 50% rise in their water bill. Some regions of the country have raised power prices — usually the biggest chunk of utility spending.

June Yang, a school administrator in the southern city of Guangzhou, has started telling her two daughters to take shorter showers to keep costs down, and reminds them often to turn off the lights when they leave a room.

“We have to use those basics for daily life, but we try not to waste them,” she said. Yang and her husband usually pay about 600 yuan ($83) a month for gas, water and power, and she expects that bill to rise starting this month.

Still, utility costs make up only about 5% of average household spending, according to broker Tianfeng Securities. That means a massive pullback in consumption isn’t likely, according to Wang Tao, UBS Group AG’s chief China economist.

Meantime, policymakers are taking action to stoke spending including a trade-in program for new appliances, with modest subsidies starting to roll out last month. President Xi Jinping’s government on Friday also announced its most forceful attempt yet to rescue the property market. Economists remain largely confident that Beijing will achieve its 5% economic growth target this year.

Read More: China Attempts to End Property Crisis With Broad Rescue Package

None of that offers much solace to the millions of consumers angry over higher bills each month.

Online Outrage

In Guangzhou, an export powerhouse, local authorities justified a recent water-rate increase as necessary for improving infrastructure and encouraging water conservation. But when they held a public hearing on the issue, residents made their discontent known.

Outrage appeared online as residents questioned the selection of the 17 people — in a city of over 18 million — who served as representatives at the hearing.

The select group included a restaurant owner who supported a proposal with bigger increases for households than for businesses. After the event, his establishment was hit by a surge of poor reviews on China’s food rating apps, according to local media. One comment read, “Why did you represent us to raise water prices? You are a restaurant with no conscience.”

Businesses aren’t spared by the price pressure. They must now confront a different dilemma: to eat up the higher operating costs or pass them along to customers who may already feel the pinch at home.

--With assistance from Kathy Chen, Tao Zhang, Josh Xiao and Alan Wong.

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