Consumer spending may not be so hot
By Wang Yanlin |
July 14, 2011, Thursday
|
Print Edition
Print Edition
CHINA'S retail sales expanded faster in June but some analysts said that consumer spending may actually still be lukewarm as the country's inflation rate touched a three-year high.
Retail sales gained 17.7 percent from a year earlier to 1.45 trillion yuan (US$224 billion) in June, the National Bureau of Statistics said yesterday. They were faster from May's growth of 16.9 percent, April's 17.1 percent and March's 17.4 percent.
"After moderating for three consecutive months, the sudden acceleration in June was really unexpected," said Li Maoyu, an analyst at Changjiang Securities Co. "It may be due to surging consumer prices that made products more expensive and not really because of people's growing demand."
China's Consumer Price Index, the main gauge of inflation, rose 6.4 percent annually last month, up 0.9 percentage point from May's level. The CPI was driven by a 14.4-percent jump in food costs, especially pork which surged by a stunning 57.1 percent from a year earlier.
"Under tightening monetary policies and expectations that the economy may cool, consumers are less likely to make big purchases," said Sun Chi, a Nomura economist.
In the first six months, China's retail sales grew 16.8 percent annually to 8.58 trillion yuan, easing from last year's pace of 18.4 percent. They contributed 47.5 percent to China's first-half economic output, while investment took 53.2 percent and exports had a negative 0.7 percent input.
Sun said consumer spending failed again to become the biggest driver of the economy. China expects to depend less on exports and investment, and rely on people's spending to boost growth.
Xue Jun, an analyst at CITIC Securities Co, said "it is unlikely that such a sudden acceleration in retail sales can be sustained."
Retail sales gained 17.7 percent from a year earlier to 1.45 trillion yuan (US$224 billion) in June, the National Bureau of Statistics said yesterday. They were faster from May's growth of 16.9 percent, April's 17.1 percent and March's 17.4 percent.
"After moderating for three consecutive months, the sudden acceleration in June was really unexpected," said Li Maoyu, an analyst at Changjiang Securities Co. "It may be due to surging consumer prices that made products more expensive and not really because of people's growing demand."
China's Consumer Price Index, the main gauge of inflation, rose 6.4 percent annually last month, up 0.9 percentage point from May's level. The CPI was driven by a 14.4-percent jump in food costs, especially pork which surged by a stunning 57.1 percent from a year earlier.
"Under tightening monetary policies and expectations that the economy may cool, consumers are less likely to make big purchases," said Sun Chi, a Nomura economist.
In the first six months, China's retail sales grew 16.8 percent annually to 8.58 trillion yuan, easing from last year's pace of 18.4 percent. They contributed 47.5 percent to China's first-half economic output, while investment took 53.2 percent and exports had a negative 0.7 percent input.
Sun said consumer spending failed again to become the biggest driver of the economy. China expects to depend less on exports and investment, and rely on people's spending to boost growth.
Xue Jun, an analyst at CITIC Securities Co, said "it is unlikely that such a sudden acceleration in retail sales can be sustained."
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