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China's inflation grows at fastest in 18 months
By Wang Yanlin |
May 11, 2010, Tuesday
|
Online Edition
Online Edition
CHINA'S economy continued stable growth in April but inflationary pressure looms large with consumer prices growing at the fastest pace in 18 months.
The Consumer Price Index, the main gauge of inflation, climbed 2.8 percent from a year earlier last month, a record high since November 2008, the National Bureau of Statistics said today.
Meanwhile, property prices across the country's 70 big and medium cities rose 12.8 percent on an annual basis in April, while new yuan lending amounted to 774 billion yuan (US$113 billion), both more than market forecast and fueling inflationary expectation.
"China's economy is managing a stable recovery from the global financial crisis. The major task now is to prevent overheating and curb inflation," said Li Maoyu, an analyst at Changjiang Securities Co.
There are signs of easing any overheating. In April, China's industrial production expanded 17.8 percent year on year, down 0.3 percent compared with the growth in March.
Urban fixed-asset investment increased 26.1 percent to 4.7 trillion yuan in the first four months, 4.4 percentage points less than a year earlier and 0.3 percentage point down from the first quarter.
On the other hand, retail sales, a measure of domestic demand, gained 18.5 percent to 1.15 trillion yuan in April, accelerating from the rise of 18 percent a month earlier.
The real challenge is to curb inflation, which has grown above the benchmark one-year deposit rate of 2.25 percent for three consecutive months, Li said.
China demanded that banks set aside more money as reserves earlier this month, the third increase of the reserve requirement ratio in one year. But the central bank seemed reluctant to increase interest rates on concern it may reverse the economic recovery.
The Consumer Price Index, the main gauge of inflation, climbed 2.8 percent from a year earlier last month, a record high since November 2008, the National Bureau of Statistics said today.
Meanwhile, property prices across the country's 70 big and medium cities rose 12.8 percent on an annual basis in April, while new yuan lending amounted to 774 billion yuan (US$113 billion), both more than market forecast and fueling inflationary expectation.
"China's economy is managing a stable recovery from the global financial crisis. The major task now is to prevent overheating and curb inflation," said Li Maoyu, an analyst at Changjiang Securities Co.
There are signs of easing any overheating. In April, China's industrial production expanded 17.8 percent year on year, down 0.3 percent compared with the growth in March.
Urban fixed-asset investment increased 26.1 percent to 4.7 trillion yuan in the first four months, 4.4 percentage points less than a year earlier and 0.3 percentage point down from the first quarter.
On the other hand, retail sales, a measure of domestic demand, gained 18.5 percent to 1.15 trillion yuan in April, accelerating from the rise of 18 percent a month earlier.
The real challenge is to curb inflation, which has grown above the benchmark one-year deposit rate of 2.25 percent for three consecutive months, Li said.
China demanded that banks set aside more money as reserves earlier this month, the third increase of the reserve requirement ratio in one year. But the central bank seemed reluctant to increase interest rates on concern it may reverse the economic recovery.
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