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Inflation and rate rise spook confidence
By Zhang Fengming |
November 10, 2010, Wednesday
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Print Edition
Print Edition
CONFIDENCE among Chinese bankcard holders fell in October due to rising inflation and the first interest rate increase in nearly three years, according to an industry report yesterday.
The Bankcard Consumer Confidence Index, compiled by China UnionPay Co and Xinhua news agency, dropped to 85.69 last month, an annual decline of 1.69 points and 0.63 percentage point less than September.
"Rising prices are taking a toll on consumers' daily non-necessities, or luxury, expenditure," UnionPay, the country's sole bankcard transaction switcher, said in a report. "Consumers cut back their expenditure on home electronic appliances and entertainment."
The non-necessities expenditure fell short of expectations, even factoring in the boost from the week-long National Day holiday in October, Shanghai-based UnionPay said.
In September, China's Consumer Price Index, the main gauge of inflation, climbed to a 23-month high of 3.6 percent on an annual basis, up from 3.5 percent in August.
Food costs, which account for one-third of the CPI basket, rocketed 8 percent.
Analysts said they expect the October CPI to rise more than 4 percent this month. The National Bureau of Statistics is due to release October's key economic data, including the much-anticipated CPI, tomorrow.
UnionPay said the CPI will remain a factor influencing bankcard confidence index.
The central bank unexpectedly raised interest rates on October 20, the first increase in nearly three years.
The Bankcard Consumer Confidence Index, compiled by China UnionPay Co and Xinhua news agency, dropped to 85.69 last month, an annual decline of 1.69 points and 0.63 percentage point less than September.
"Rising prices are taking a toll on consumers' daily non-necessities, or luxury, expenditure," UnionPay, the country's sole bankcard transaction switcher, said in a report. "Consumers cut back their expenditure on home electronic appliances and entertainment."
The non-necessities expenditure fell short of expectations, even factoring in the boost from the week-long National Day holiday in October, Shanghai-based UnionPay said.
In September, China's Consumer Price Index, the main gauge of inflation, climbed to a 23-month high of 3.6 percent on an annual basis, up from 3.5 percent in August.
Food costs, which account for one-third of the CPI basket, rocketed 8 percent.
Analysts said they expect the October CPI to rise more than 4 percent this month. The National Bureau of Statistics is due to release October's key economic data, including the much-anticipated CPI, tomorrow.
UnionPay said the CPI will remain a factor influencing bankcard confidence index.
The central bank unexpectedly raised interest rates on October 20, the first increase in nearly three years.
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