Consumer prices rise 2.9%
By Wang Yanlin |
July 16, 2010, Friday
|
Print Edition
Print Edition
ALTHOUGH China's inflation rate slowed in June, policy makers need to be vigilant against a rebound in consumer prices due to the influence of recent natural disasters, analysts said.
The Consumer Price Index, the main gauge of inflation, rose 2.9 percent last month from a year earlier, the National Bureau of Statistics said yesterday.
It slowed from May's 3.1 percent gain, which was the fastest pace in 19 months and already above the central bank's target line of 3 percent.
"June's CPI was lower than our previous estimate," said Li Maoyu, an analyst at Changjiang Securities Co, who had predicted an expansion of 3.3 percent.
"Slower economic growth, recent moderate food price inflation, weakened commodity prices and the appreciation of the yuan in the past few months all point to dampened inflation pressures," Li said.
The slower growth was led by a smaller increase in food costs, according to the bureau, while the central government also enhanced efforts to mop up excessive liquidity in the open market.
The Producer Price Index, the factory-gate measurement of inflation, also slowed faster than expected, Li said. June's PPI expanded 6.4 percent on an annual basis, falling from a 7.1 percent jump in May.
Sheng Laiyun, a spokesman at the bureau, said slower inflation makes it easier to control going forward.
But some other analysts warned that consumer prices may rise in the short term.
Wang Qing, an economist at Morgan Stanley, said the inflation rate may peak this month. Zhu Jianfang, an analyst at CITIC Securities Co, said the CPI may run above 3 percent in the third quarter due to frequent natural disasters, including drought and flood, in recent months.
To control inflationary expectations, the National Development and Reform Commission will fine individuals and companies up to 2 million yuan (US$295,000) for circulating misleading or false information about price hikes.
It also recommended punishment measures to combat commodity hoarding and forcing up prices. Serious offenders will lose their business licenses and be subject to confiscation of their illegal gains and receive fines up to five times the illegal gains, the commission said this week.
The Consumer Price Index, the main gauge of inflation, rose 2.9 percent last month from a year earlier, the National Bureau of Statistics said yesterday.
It slowed from May's 3.1 percent gain, which was the fastest pace in 19 months and already above the central bank's target line of 3 percent.
"June's CPI was lower than our previous estimate," said Li Maoyu, an analyst at Changjiang Securities Co, who had predicted an expansion of 3.3 percent.
"Slower economic growth, recent moderate food price inflation, weakened commodity prices and the appreciation of the yuan in the past few months all point to dampened inflation pressures," Li said.
The slower growth was led by a smaller increase in food costs, according to the bureau, while the central government also enhanced efforts to mop up excessive liquidity in the open market.
The Producer Price Index, the factory-gate measurement of inflation, also slowed faster than expected, Li said. June's PPI expanded 6.4 percent on an annual basis, falling from a 7.1 percent jump in May.
Sheng Laiyun, a spokesman at the bureau, said slower inflation makes it easier to control going forward.
But some other analysts warned that consumer prices may rise in the short term.
Wang Qing, an economist at Morgan Stanley, said the inflation rate may peak this month. Zhu Jianfang, an analyst at CITIC Securities Co, said the CPI may run above 3 percent in the third quarter due to frequent natural disasters, including drought and flood, in recent months.
To control inflationary expectations, the National Development and Reform Commission will fine individuals and companies up to 2 million yuan (US$295,000) for circulating misleading or false information about price hikes.
It also recommended punishment measures to combat commodity hoarding and forcing up prices. Serious offenders will lose their business licenses and be subject to confiscation of their illegal gains and receive fines up to five times the illegal gains, the commission said this week.
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