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China's CPI edges up, driven by food costs
By Pan Xiaoyi |
September 12, 2010, Sunday
|
Print Edition
Print Edition
CHINA'S inflation rose to a 22-month high while industrial output and other economic data beat expectations, pointing to a stable consolidation in the country's economic growth.
The Consumer Price Index, the main gauge of inflation, rose 3.5 percent from a year earlier last month, the National Bureau of Statistics said yesterday.
That compared to an increase of 3.3 percent in July and 2.9 percent in June.
In the first eight months, the inflation index gained 2.8 percent year on year, still below the yearly target of 3 percent set by the central bank.
"Higher food prices were the main driver to push up the CPI," said Zhu Jianfang, an analyst with China Securities Co. "As vegetable prices are to stabilize in the fourth quarter, the CPI may peak in the third quarter."
Zhu added: "There is slim possibility that an interest rate increase may happen in the current quarter."
Food costs, which account for a third of the CPI basket, rose 7.5 percent from a year earlier in August as a result of the extreme weather and natural disasters including widespread flooding, while prices in the non-food sector advanced just 1.5 percent.
"The target to contain inflation below 3 percent is still achievable under proper management in the following months," said Sheng Laiyun, a spokesman for the national statistics bureau. Sheng dismissed speculation that the decision to release the economic data on a Saturday, two days ahead of schedule, was related to possible adjustments in the monetary policy.
"The decision is made on demands from the public to share information as early as possible," said Sheng.
Industrial production grew 13.9 percent year-on-year after slowing to 13.4 percent in July.
Urban fixed investment grew 24.8 percent in the first eight months of the year compared with the same period in 2009.
The results were achieved despite government efforts to clamp down on property speculation, shut energy-intensive factories and limit bad loans.
"China's economy is showing signs of stabilizing although it does not necessarily mean a bottoming out," said Chen Wei, a China Minzu Securities Co analyst.
Gross domestic product rose 10.3 percent in the second quarter from a year earlier after an 11.9 percent gain in the first three months.
The Producer Price Index, the factory-gate measure of inflation, rose 4.3 percent in August from a year earlier, slower from July's 4.8 percent growth, the statistics bureau said.
The slowdown in production costs will benefit CPI in later months.
Retail sales gained 18.4 percent in August from a year earlier thanks to auto sales.
The Consumer Price Index, the main gauge of inflation, rose 3.5 percent from a year earlier last month, the National Bureau of Statistics said yesterday.
That compared to an increase of 3.3 percent in July and 2.9 percent in June.
In the first eight months, the inflation index gained 2.8 percent year on year, still below the yearly target of 3 percent set by the central bank.
"Higher food prices were the main driver to push up the CPI," said Zhu Jianfang, an analyst with China Securities Co. "As vegetable prices are to stabilize in the fourth quarter, the CPI may peak in the third quarter."
Zhu added: "There is slim possibility that an interest rate increase may happen in the current quarter."
Food costs, which account for a third of the CPI basket, rose 7.5 percent from a year earlier in August as a result of the extreme weather and natural disasters including widespread flooding, while prices in the non-food sector advanced just 1.5 percent.
"The target to contain inflation below 3 percent is still achievable under proper management in the following months," said Sheng Laiyun, a spokesman for the national statistics bureau. Sheng dismissed speculation that the decision to release the economic data on a Saturday, two days ahead of schedule, was related to possible adjustments in the monetary policy.
"The decision is made on demands from the public to share information as early as possible," said Sheng.
Industrial production grew 13.9 percent year-on-year after slowing to 13.4 percent in July.
Urban fixed investment grew 24.8 percent in the first eight months of the year compared with the same period in 2009.
The results were achieved despite government efforts to clamp down on property speculation, shut energy-intensive factories and limit bad loans.
"China's economy is showing signs of stabilizing although it does not necessarily mean a bottoming out," said Chen Wei, a China Minzu Securities Co analyst.
Gross domestic product rose 10.3 percent in the second quarter from a year earlier after an 11.9 percent gain in the first three months.
The Producer Price Index, the factory-gate measure of inflation, rose 4.3 percent in August from a year earlier, slower from July's 4.8 percent growth, the statistics bureau said.
The slowdown in production costs will benefit CPI in later months.
Retail sales gained 18.4 percent in August from a year earlier thanks to auto sales.
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