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August likely to see record growth in inflation
By Wang Yanlin |
September 6, 2010, Monday
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Online Edition
Online Edition
CHINA'S inflation growth may hit a record in August while industrial production and other key economic indices are likely to moderate further, paving the way for policy fine-tuning to support growth, analysts said.
Trade data for August will be released on Friday. Loans, deposits and money supplies are due on Saturday, while the National Bureau of Statistics is set to unveil other key economic data, including consumer prices, industrial output and retail sales, today.
Li Maoyu, an analyst at the Changjiang Securities Co, said China's economy is at a crux -- turning good or bad all depends on August performance and possible policy adjustments afterwards.
"China's economic growth seems to be losing steam due to efforts to curb energy consumption and suppress housing speculation," Li said. "We anticipate the government may relax the policies a bit to prevent an abrupt slowdown."
China was confirmed to have replaced Japan as the world's second largest economy in the April-June period. But the country's growth rate moderated to 10.3 percent from a year earlier in the second quarter, down from the climb of 11.9 percent in the first three months.
Wang Qing, an economist at Morgan Stanley, expected China's Consumer Price Index to continue to surge, becoming a trigger for policy relaxation.
"We envisage that headline CPI inflation may edge up to 3.4 percent year on year in August, reflecting higher food inflation and stable non-food inflation," Wang said.
China's July inflation grew 3.3 percent, the fastest in 21 months, compared with June's 2.9 percent and May's 3.1 percent.
In respond, China has ordered local governments to reduce food prices by raising vegetable production and improving retail services.
Trade data for August will be released on Friday. Loans, deposits and money supplies are due on Saturday, while the National Bureau of Statistics is set to unveil other key economic data, including consumer prices, industrial output and retail sales, today.
Li Maoyu, an analyst at the Changjiang Securities Co, said China's economy is at a crux -- turning good or bad all depends on August performance and possible policy adjustments afterwards.
"China's economic growth seems to be losing steam due to efforts to curb energy consumption and suppress housing speculation," Li said. "We anticipate the government may relax the policies a bit to prevent an abrupt slowdown."
China was confirmed to have replaced Japan as the world's second largest economy in the April-June period. But the country's growth rate moderated to 10.3 percent from a year earlier in the second quarter, down from the climb of 11.9 percent in the first three months.
Wang Qing, an economist at Morgan Stanley, expected China's Consumer Price Index to continue to surge, becoming a trigger for policy relaxation.
"We envisage that headline CPI inflation may edge up to 3.4 percent year on year in August, reflecting higher food inflation and stable non-food inflation," Wang said.
China's July inflation grew 3.3 percent, the fastest in 21 months, compared with June's 2.9 percent and May's 3.1 percent.
In respond, China has ordered local governments to reduce food prices by raising vegetable production and improving retail services.
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