CPI shows steady economic rise
By Wang Yanlin |
November 10, 2012, Saturday
|
Print Edition
Print Edition
China's economy performed better than expected in October with inflation growing at an almost three-year low of 1.7 percent, an indicator of stabilizing growth in the world's second-largest economy. Key growth indicators such as industrial production, retail sales and fixed-asset investment surged.
Consumer Price Index, the main gauge of inflation, rose 1.7 percent from a year earlier last month, the National Bureau of Statistics said yesterday.
The pace moderated from an increase of 1.9 percent in September and the slowest since February 2010.
The new figures more or less rule out the possibility of any further supportive measures such as cuts in reserve requirement ratio or interest rates.
Food prices, which account for nearly one-third in the CPI basket, expanded 1.8 percent in October, down from 2.5 percent a month earlier. The non-food sector remained flat at 1.7 percent.
Producer Price Index, the factory-gate measurement of inflation, fell 2.8 percent on an annual basis last month, compared to the 3.6 percent fall in September.
"It is safe to say inflation is no longer a threat to China's economy," said Li Maoyu, an analyst at Changjiang Securities Co. "We expect the consumer prices to fluctuate around 2 percent in the coming months, and it should not be a problem for China to achieve its goal of keeping it under 4 percent this year."
In the first 10 months, China's CPI expanded 2.7 percent, well below the 4 percent target set at the beginning of this year.
Meanwhile, China's industrial production gained 9.6 percent annually in October, accelerating from 9.2 percent a month earlier. Retail sales increased 14.5 percent, up 0.3 percentage points from September, largely due to a longer National Day holiday that prompted heavy consumer spending.
Fixed-asset investment rose to 20.7 percent in the first 10 months from 20.5 percent in the first three quarters, after the government quickened the process of approving big projects.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said the moderating inflation meant there was good reason for the central bank to keep the policies relaxed.
"The economic fundamentals are better than expected, indicating that the recovery was rapidly taking place and did not need any further policy moves," Zhou said. "Also, previous measures, such as the repurchase agreements, have kept the market liquidity at a relatively rich level, thus lesser possibilities of further loosening policies."
Zhang Zhiwei, an economist at Nomura, said the data was encouraging because it was an indicator of a stronger performance for the rest of the fourth quarter as policies are eased through bank loans, trust loans and bond issuance.
China's gross domestic product grew 7.7 percent year on year in the first three quarters, which was above the government target of a 7.5 percent growth this year.
Some economists projected that China's growth may pick up to 7.9 percent or even 8 percent in the fourth quarter as a result of previous easing policies.
China has set a goal of doubling its 2010 economic output and people's per capita income by the year 2020.
Consumer Price Index, the main gauge of inflation, rose 1.7 percent from a year earlier last month, the National Bureau of Statistics said yesterday.
The pace moderated from an increase of 1.9 percent in September and the slowest since February 2010.
The new figures more or less rule out the possibility of any further supportive measures such as cuts in reserve requirement ratio or interest rates.
Food prices, which account for nearly one-third in the CPI basket, expanded 1.8 percent in October, down from 2.5 percent a month earlier. The non-food sector remained flat at 1.7 percent.
Producer Price Index, the factory-gate measurement of inflation, fell 2.8 percent on an annual basis last month, compared to the 3.6 percent fall in September.
"It is safe to say inflation is no longer a threat to China's economy," said Li Maoyu, an analyst at Changjiang Securities Co. "We expect the consumer prices to fluctuate around 2 percent in the coming months, and it should not be a problem for China to achieve its goal of keeping it under 4 percent this year."
In the first 10 months, China's CPI expanded 2.7 percent, well below the 4 percent target set at the beginning of this year.
Meanwhile, China's industrial production gained 9.6 percent annually in October, accelerating from 9.2 percent a month earlier. Retail sales increased 14.5 percent, up 0.3 percentage points from September, largely due to a longer National Day holiday that prompted heavy consumer spending.
Fixed-asset investment rose to 20.7 percent in the first 10 months from 20.5 percent in the first three quarters, after the government quickened the process of approving big projects.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said the moderating inflation meant there was good reason for the central bank to keep the policies relaxed.
"The economic fundamentals are better than expected, indicating that the recovery was rapidly taking place and did not need any further policy moves," Zhou said. "Also, previous measures, such as the repurchase agreements, have kept the market liquidity at a relatively rich level, thus lesser possibilities of further loosening policies."
Zhang Zhiwei, an economist at Nomura, said the data was encouraging because it was an indicator of a stronger performance for the rest of the fourth quarter as policies are eased through bank loans, trust loans and bond issuance.
China's gross domestic product grew 7.7 percent year on year in the first three quarters, which was above the government target of a 7.5 percent growth this year.
Some economists projected that China's growth may pick up to 7.9 percent or even 8 percent in the fourth quarter as a result of previous easing policies.
China has set a goal of doubling its 2010 economic output and people's per capita income by the year 2020.
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