Faster PPI due to higher costs
By Wang Yanlin |
May 24, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S producer prices posted a faster rise last month due to higher labor costs and more expensive commodities, causing economists to worry about more pressure over rising consumer prices in Shanghai, which hit a two-year high last month.
The Producer Price Index, the factory-gate gauge of inflation, grew 3.3 percent from a year earlier, the Shanghai Statistics Bureau said yesterday. The pace picked up from 3.2 percent in March.
Although the PPI was lower than the nation's average of 6.8 percent in April, the rising producer prices in Shanghai created concerns about the city's ability to control price increases.
"An increase in production costs will be reflected in consumer prices sooner or later," said Li Maoyu, an analyst at Changjiang Securities Co. "The city may have to step up efforts to tame inflation."
Shanghai's Consumer Price Index, the main gauge of inflation, surged to a two-year high of 5.1 percent in April, bolstered by a 9.9 percent rise in food costs.
To ease inflation, the People's Bank of China has increased reserve requirement ratio five times this year so far, along with two interest rate hikes.
Since the middle of last year, Shanghai has launched policies that included streamlining distribution process to cut costs, providing subsidies to producers to boost supply, and tightening regulations to punish speculators who distorted prices.
The Producer Price Index, the factory-gate gauge of inflation, grew 3.3 percent from a year earlier, the Shanghai Statistics Bureau said yesterday. The pace picked up from 3.2 percent in March.
Although the PPI was lower than the nation's average of 6.8 percent in April, the rising producer prices in Shanghai created concerns about the city's ability to control price increases.
"An increase in production costs will be reflected in consumer prices sooner or later," said Li Maoyu, an analyst at Changjiang Securities Co. "The city may have to step up efforts to tame inflation."
Shanghai's Consumer Price Index, the main gauge of inflation, surged to a two-year high of 5.1 percent in April, bolstered by a 9.9 percent rise in food costs.
To ease inflation, the People's Bank of China has increased reserve requirement ratio five times this year so far, along with two interest rate hikes.
Since the middle of last year, Shanghai has launched policies that included streamlining distribution process to cut costs, providing subsidies to producers to boost supply, and tightening regulations to punish speculators who distorted prices.
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