NDRC optimistic on inflation
By Wang Yanlin |
June 23, 2011, Thursday
|
Print Edition
Print Edition
INFLATION can be controlled in the second half of this year but consumer prices will likely rise further in June due to a lower comparative base and higher food costs, the country's top economic planning agency said yesterday.
"We expect consumer prices will rise faster this month than in May as an even lower comparative base is included, and recent droughts and floods may push up the costs of rice and other agricultural products," the National Development and Reform Commission said in a statement, quoting pricing bureau officials.
The commission said although inflation exhibited an upward trend, the actual retail price increase was easing thanks to various government measures and a tighter monetary policy.
The Consumer Price Index surged 5.5 percent last month from a year earlier, the fastest pace in 34 months. It prompted the central bank to raise the reserve requirement ratio for the sixth time this year.
Inflation has surpassed the government target of 4 percent in each of the first five months and some economists anticipate a 6 percent rise in June.
Despite the difficult outlook, the commission was optimistic. It said recent floods and droughts along the Yangtze River may trigger more price rises in agricultural products, but they are unlikely to be sharp increases as harvests in northern China will offset some of the losses.
"We have a bumper reserve of rice and are able to keep staple food prices steady," the statement said.
Pork costs will also increase because of reduced supply after over-production in the past two years. The commission said the market was determining pork prices and a reasonable increase will ensure farmers get a fair return.
The commission said government efforts to curb inflation were effective since this round of inflation was international, and China's consumer prices were lower than in most emerging markets.
The NDRC did not mention whether the government will do anything else to reduce inflation. Some economists expect another rate rise in the next few months.
"We expect consumer prices will rise faster this month than in May as an even lower comparative base is included, and recent droughts and floods may push up the costs of rice and other agricultural products," the National Development and Reform Commission said in a statement, quoting pricing bureau officials.
The commission said although inflation exhibited an upward trend, the actual retail price increase was easing thanks to various government measures and a tighter monetary policy.
The Consumer Price Index surged 5.5 percent last month from a year earlier, the fastest pace in 34 months. It prompted the central bank to raise the reserve requirement ratio for the sixth time this year.
Inflation has surpassed the government target of 4 percent in each of the first five months and some economists anticipate a 6 percent rise in June.
Despite the difficult outlook, the commission was optimistic. It said recent floods and droughts along the Yangtze River may trigger more price rises in agricultural products, but they are unlikely to be sharp increases as harvests in northern China will offset some of the losses.
"We have a bumper reserve of rice and are able to keep staple food prices steady," the statement said.
Pork costs will also increase because of reduced supply after over-production in the past two years. The commission said the market was determining pork prices and a reasonable increase will ensure farmers get a fair return.
The commission said government efforts to curb inflation were effective since this round of inflation was international, and China's consumer prices were lower than in most emerging markets.
The NDRC did not mention whether the government will do anything else to reduce inflation. Some economists expect another rate rise in the next few months.
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