Inflation higher than expected but economic activity 'strong'
By Wang Yanlin |
March 12, 2011, Saturday
|
Print Edition
Print Edition
INFLATION in February remained at January's level, higher than the government's 4 percent target for this year, figures released yesterday show.
Other key data showed China's economy powered ahead steadily in the first two months of 2011 with faster industrial production growth and stable investment, but retail sales slowed a little.
"China's overall economic activity remained strong," said Sun Chi, an economist at Nomura International (Hong Kong) Ltd. "Inflation was slightly higher than expected, but industrial output quickened - an indication of robust domestic demand."
The Consumer Price Index, the main gauge of inflation, rose 4.9 percent from a year earlier, the National Bureau of Statistics said.
Food costs surged 11 percent year on year last month, up from January's 10.3 percent and December's 9.6 percent.
The Producer Price Index, the factory-gate inflation measurement, advanced 7.2 percent in February, compared with January's 6.6 percent.
"Rising commodity prices globally, higher production costs in China and a high comparative base work together to create rather high consumer prices in February," said bureau spokesman Sheng Laiyun.
He said the battle against soaring prices would be tough this year, but a number of factors meant that keeping inflation under control was possible.
"Bumper harvests in the past seven years mean that we have plenty of reserves of food to stabilize supply," Sheng said. "Also, China has shifted to a prudent monetary policy stance to soak up market liquidity, which is good for taming inflation."
"Above all, the Chinese government has made it a priority in the work agenda to keep inflation under control."
Zhang Ping, minister of the National Development and Reform Commission, said last week that the government was confident of checking inflation on the back of abundant grain reserves.
Grain reserves in China have reached 40 percent of annual consumption, compared to the world standard of 17 to 18 percent. And the country's wheat reserves stand at 100 billion kilograms, about one year's output.
In other figures released yesterday, industrial production grew 14.1 percent on an annual basis in the first two months, up 0.6 percentage points from December.
Fixed-asset investment expanded 24.9 percent from a year earlier in the first two months, compared to last year's average of 23.8 percent.
However, retail sales growth slowed by 3.3 percentage points from December to 15.8 percent in the January-February period.
Other key data showed China's economy powered ahead steadily in the first two months of 2011 with faster industrial production growth and stable investment, but retail sales slowed a little.
"China's overall economic activity remained strong," said Sun Chi, an economist at Nomura International (Hong Kong) Ltd. "Inflation was slightly higher than expected, but industrial output quickened - an indication of robust domestic demand."
The Consumer Price Index, the main gauge of inflation, rose 4.9 percent from a year earlier, the National Bureau of Statistics said.
Food costs surged 11 percent year on year last month, up from January's 10.3 percent and December's 9.6 percent.
The Producer Price Index, the factory-gate inflation measurement, advanced 7.2 percent in February, compared with January's 6.6 percent.
"Rising commodity prices globally, higher production costs in China and a high comparative base work together to create rather high consumer prices in February," said bureau spokesman Sheng Laiyun.
He said the battle against soaring prices would be tough this year, but a number of factors meant that keeping inflation under control was possible.
"Bumper harvests in the past seven years mean that we have plenty of reserves of food to stabilize supply," Sheng said. "Also, China has shifted to a prudent monetary policy stance to soak up market liquidity, which is good for taming inflation."
"Above all, the Chinese government has made it a priority in the work agenda to keep inflation under control."
Zhang Ping, minister of the National Development and Reform Commission, said last week that the government was confident of checking inflation on the back of abundant grain reserves.
Grain reserves in China have reached 40 percent of annual consumption, compared to the world standard of 17 to 18 percent. And the country's wheat reserves stand at 100 billion kilograms, about one year's output.
In other figures released yesterday, industrial production grew 14.1 percent on an annual basis in the first two months, up 0.6 percentage points from December.
Fixed-asset investment expanded 24.9 percent from a year earlier in the first two months, compared to last year's average of 23.8 percent.
However, retail sales growth slowed by 3.3 percentage points from December to 15.8 percent in the January-February period.
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