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May inflation up 5.5%, rise in interest rate likely
By Wang Yanlin |
June 14, 2011, Tuesday
|
Online Edition
Online Edition
CHINA'S inflation rate surged 5.5 percent in May to a three-year high that analysts said it may prompt another raise of interest rate.
Although manufacturing and retail sales continued to moderate last month, Sheng Laiyun, a National Bureau of Statistics spokesman, said China's economy still grew at a stable pace as the real economy secured a strong foothold.
"The major challenge for China now is to manage a high inflation," Sheng said this morning at a press conference in Beijing. "Governments at all levels should put price control on the top of their agenda."
May's annualized 5.5 percent growth of Consumer Price Index, the main gauge of inflation, was the highest since July of 2008. It was driven by an 11.7 percent jump in food costs amid droughts in central China, which contributed 63.6 percent of the CPI increase.
Producer Price Index, the factory gate measure of inflation, expanded 6.8 percent from a year earlier, flat with April's figure.
Wang Qing, a Morgan Stanley economist, said such a grim situation may prompt the central bank to raise the interest rate again, possibly this month.
China's industrial production rose 13.3 percent year-on-year in May, down from 13.4 percent in April. Retail sales grew 16.9 percent, 0.2 percentage points down from April.
Fixed asset investment in the first five months gained 25.8 percent unexpectedly from a year earlier, 0.4 percentage point quicker than the pace through April. It was boosted by a 34.6-percent hike in property investment, the bureau said.
Although manufacturing and retail sales continued to moderate last month, Sheng Laiyun, a National Bureau of Statistics spokesman, said China's economy still grew at a stable pace as the real economy secured a strong foothold.
"The major challenge for China now is to manage a high inflation," Sheng said this morning at a press conference in Beijing. "Governments at all levels should put price control on the top of their agenda."
May's annualized 5.5 percent growth of Consumer Price Index, the main gauge of inflation, was the highest since July of 2008. It was driven by an 11.7 percent jump in food costs amid droughts in central China, which contributed 63.6 percent of the CPI increase.
Producer Price Index, the factory gate measure of inflation, expanded 6.8 percent from a year earlier, flat with April's figure.
Wang Qing, a Morgan Stanley economist, said such a grim situation may prompt the central bank to raise the interest rate again, possibly this month.
China's industrial production rose 13.3 percent year-on-year in May, down from 13.4 percent in April. Retail sales grew 16.9 percent, 0.2 percentage points down from April.
Fixed asset investment in the first five months gained 25.8 percent unexpectedly from a year earlier, 0.4 percentage point quicker than the pace through April. It was boosted by a 34.6-percent hike in property investment, the bureau said.
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