Fear that inflation will race on
By Wang Yanlin |
August 4, 2011, Thursday
|
Print Edition
Print Edition
ECONOMISTS fear figures due to be released next week will show inflation is continuing to race in China.
Analysts are concerned the July rate will turn out to be even higher than June, which was a three-year high.
The National Bureau of Statistics will release July's key economic data next Tuesday. Among the figures, consumer prices and industrial production are of most concern as they are indicators of the balance between inflation and economic growth.
Lu Zhengwei, an economist at the Industrial Bank, said: "After June's data dampened concerns of a hard landing and stagflation (high inflation coupled with low economic growth), July's data will offer a clearer view of the economic outlook. We expect July's figures may rekindle such concerns because inflation may rise further and industrial production growth may continue to be moderate."
Lu forecast the Consumer Price Index, the main gauge of inflation, may be between 6.3 percent and 6.7 percent, and industrial production may grow 14.6 percent, with the Purchasing Managers' Index for July already indicating slower growth.
China's consumer prices swelled 6.4 percent year on year in June, a three-year high that resulted in an interest rate increase on July 6. It was the third increase this year, along with six rises in the reserve requirement ratio - setting the minimum reserves banks must hold - to combat inflation.
China's industrial output in June jumped 15.1 percent from a year earlier, accelerating from May's 13.3 percent figure.
However, the official PMI, released on Monday, indicated a continued moderating manufacturing sector, although it was better than many economists had expected. July's PMI was 50.7 percent, down 0.2 percentage points from a month earlier.
Li Pumin, a spokesman for the National Development and Reform Commission, China's top economic planning agency, said on Tuesday that China will continue to fight inflation resolutely in the second half, and the economy retains great potential for rapid growth.
He said macroeconomic policies for the rest of this year would put more emphasis on resolving prominent issues, including stabilizing prices and maintaining real estate policies, as well as improving operational conditions for small firms.
Analysts are concerned the July rate will turn out to be even higher than June, which was a three-year high.
The National Bureau of Statistics will release July's key economic data next Tuesday. Among the figures, consumer prices and industrial production are of most concern as they are indicators of the balance between inflation and economic growth.
Lu Zhengwei, an economist at the Industrial Bank, said: "After June's data dampened concerns of a hard landing and stagflation (high inflation coupled with low economic growth), July's data will offer a clearer view of the economic outlook. We expect July's figures may rekindle such concerns because inflation may rise further and industrial production growth may continue to be moderate."
Lu forecast the Consumer Price Index, the main gauge of inflation, may be between 6.3 percent and 6.7 percent, and industrial production may grow 14.6 percent, with the Purchasing Managers' Index for July already indicating slower growth.
China's consumer prices swelled 6.4 percent year on year in June, a three-year high that resulted in an interest rate increase on July 6. It was the third increase this year, along with six rises in the reserve requirement ratio - setting the minimum reserves banks must hold - to combat inflation.
China's industrial output in June jumped 15.1 percent from a year earlier, accelerating from May's 13.3 percent figure.
However, the official PMI, released on Monday, indicated a continued moderating manufacturing sector, although it was better than many economists had expected. July's PMI was 50.7 percent, down 0.2 percentage points from a month earlier.
Li Pumin, a spokesman for the National Development and Reform Commission, China's top economic planning agency, said on Tuesday that China will continue to fight inflation resolutely in the second half, and the economy retains great potential for rapid growth.
He said macroeconomic policies for the rest of this year would put more emphasis on resolving prominent issues, including stabilizing prices and maintaining real estate policies, as well as improving operational conditions for small firms.
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