Rising pork prices to impact inflation
By Zhang Fengming |
June 29, 2011, Wednesday
|
Print Edition
Print Edition
Pork prices in China rose 4.5 percent last week from the previous one, the Ministry of Commerce said on its website yesterday.
Average wholesale vegetable prices jumped 2.3 percent in the week ended Sunday and egg prices fell 0.1 percent, according to the ministry.
Economists said rising pork prices will make it much more difficult to control inflation.
Economists expect June inflation to be more than 6 percent.
"Pork prices have gained about 60 percent year on year," said Oliver Chiu, head of research and investment advisory of retail banking at Citibank China. "It's almost certain June inflation will break 6 percent."
Lu Zhengwei, an Industrial Bank senior economist, said he expects June inflation to rise 6.2 percent.
The Consumer Price Index, the main gauge of inflation, for June will be released on July 11. Inflation reached a 34-month high of 5.5 percent in May.
The central government is still prioritizing inflation on its work agenda this year, with tightened credit controls being used to drive out credit-driven inflation.
Economists said inflation could peak in June or July and then wane in the third and fourth quarter.
They said they expect tight monetary measures will eventually tame inflation.
Chiu expected up to two more interest rate increases this year to push the one-year benchmark deposit rate to 3.75 percent, up from 3.25 percent now.
China has raised interest rates four times since October. The People's Bank of China has raised the reserve requirement ratio six times so far this year to siphon liquidity.
Average wholesale vegetable prices jumped 2.3 percent in the week ended Sunday and egg prices fell 0.1 percent, according to the ministry.
Economists said rising pork prices will make it much more difficult to control inflation.
Economists expect June inflation to be more than 6 percent.
"Pork prices have gained about 60 percent year on year," said Oliver Chiu, head of research and investment advisory of retail banking at Citibank China. "It's almost certain June inflation will break 6 percent."
Lu Zhengwei, an Industrial Bank senior economist, said he expects June inflation to rise 6.2 percent.
The Consumer Price Index, the main gauge of inflation, for June will be released on July 11. Inflation reached a 34-month high of 5.5 percent in May.
The central government is still prioritizing inflation on its work agenda this year, with tightened credit controls being used to drive out credit-driven inflation.
Economists said inflation could peak in June or July and then wane in the third and fourth quarter.
They said they expect tight monetary measures will eventually tame inflation.
Chiu expected up to two more interest rate increases this year to push the one-year benchmark deposit rate to 3.75 percent, up from 3.25 percent now.
China has raised interest rates four times since October. The People's Bank of China has raised the reserve requirement ratio six times so far this year to siphon liquidity.
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