Experts expect higher inflation
By Wang Yanlin |
September 7, 2010, Tuesday
|
Print Edition
Print Edition
ANALYSTS are expecting forthcoming data to show that China's inflation growth hit a new record in August and that industrial production and other key economic indicators moderated further.
Trade data for August will be released on Friday. Loans, deposits and money supplies are due on Saturday, and the National Bureau of Statistics is scheduled to unveil other key economic data, including consumer prices, industrial output and retail sales, next Monday.
Li Maoyu, an analyst at the Changjiang Securities, said China's economy is at a junction, turning good or bad is dependent on the performance in August and the possible policy adjustments that come after.
"China's economic growth seems to be losing steam because of the efforts to curb energy consumption and fight against housing speculation," Li said. "We anticipate the government may relax the policies a bit to prevent an abrupt slowdown."
China was confirmed to have overtaken Japan to become the world's second largest economy in the April-June period. But the country's growth rate moderated in the second quarter to 10.3 percent from a year earlier, down from 11.9 percent in the first three months.
CPI surge seen
Wang Qing, an economist at Morgan Stanley, expected China's Consumer Price Index may continue to surge, becoming one 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.
In July, China's inflation grew at the fastest pace in 21 months - 3.3 percent, compared with June's 2.9 percent and May's 3.1 percent. In response, China has ordered local governments to reduce food prices by increasing vegetable production and improving retail services.
Wang said the CPI may have peaked in August and will gradually soften in coming months with the fading effect of a low comparative base. Producer prices may slide to 4.5 percent in August from July's 4.8 percent.
A real challenge is to balance the slowdown in industrial production with the goal of achieving energy conservation.
Wang said he expects to see that industrial production slowed to 12.8 percent growth last month, down from the expansion of 13.4 percent in July.
In other fronts, Wang forecast the August data to show that China's exports maintained a rapid rise of 35 percent, thanks to better-than-expected recovery in major trading partners. But the imports rate may show moderation.
Trade data for August will be released on Friday. Loans, deposits and money supplies are due on Saturday, and the National Bureau of Statistics is scheduled to unveil other key economic data, including consumer prices, industrial output and retail sales, next Monday.
Li Maoyu, an analyst at the Changjiang Securities, said China's economy is at a junction, turning good or bad is dependent on the performance in August and the possible policy adjustments that come after.
"China's economic growth seems to be losing steam because of the efforts to curb energy consumption and fight against housing speculation," Li said. "We anticipate the government may relax the policies a bit to prevent an abrupt slowdown."
China was confirmed to have overtaken Japan to become the world's second largest economy in the April-June period. But the country's growth rate moderated in the second quarter to 10.3 percent from a year earlier, down from 11.9 percent in the first three months.
CPI surge seen
Wang Qing, an economist at Morgan Stanley, expected China's Consumer Price Index may continue to surge, becoming one 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.
In July, China's inflation grew at the fastest pace in 21 months - 3.3 percent, compared with June's 2.9 percent and May's 3.1 percent. In response, China has ordered local governments to reduce food prices by increasing vegetable production and improving retail services.
Wang said the CPI may have peaked in August and will gradually soften in coming months with the fading effect of a low comparative base. Producer prices may slide to 4.5 percent in August from July's 4.8 percent.
A real challenge is to balance the slowdown in industrial production with the goal of achieving energy conservation.
Wang said he expects to see that industrial production slowed to 12.8 percent growth last month, down from the expansion of 13.4 percent in July.
In other fronts, Wang forecast the August data to show that China's exports maintained a rapid rise of 35 percent, thanks to better-than-expected recovery in major trading partners. But the imports rate may show moderation.
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