CPI Consumer Price Index News
- Producer prices climb faster as costs expand
Date: 14-May-2007 Sources: (Xinhua Online)
China's factory-gate inflation grew at a faster pace in April as the costs of non-ferrous metals, steel and coal increased.
Factory-gate prices rose 2.9 percent from a year earlier, the National Bureau of Statistics said yesterday. The growth was faster than the 2.7 percent increase in March. The bureau is scheduled to announce April's consumer price inflation on Monday.
'We don't expect the uptick of producer-price inflation and consumer-price inflation to extend into the second half of this year given the falling crude oil prices, overcapacity risks, and more measures form the central bank to come,' said Zhang Yang, an analyst at Orient Securities Co.
Central bank Governor Zhou Xiaochuan said last Saturday that there's still room to raise reserve requirement ratios to slow inflation and lending.
The People's Bank of China said on April 29 it would increase the amount of money banks are asked to set aside by 0.5 percentage point to 11 percent. The move, to take effect from Tuesday, is the seventh in a row, along with three interest rates rises since last April as the central bank tries to stem price increases and drain cash from the banking system.
The consumer price index, an indicator of the country's inflation, jumped 3.3 percent in March, the largest rise in more than two years. The increase also breached the central bank's target of keeping inflation below three percent this year.
'Inflation, though rising slightly, is not as big a problem facing the economy now as heated investment which results in bulging credit and excessive liquidity,' said Zhang.
China's economy expanded a faster-than-expected 11.1 percent in the first quarter year on year, fueled by surging overseas sales and soaring investments.
The government has cut taxes, raised the minimum wage and increased spending on education, welfare and health care to boost consumption.
Among the key components of the factory-gate gauge, the producer price of non-ferrous metals jumped 18.8 percent last month after gaining 16.3 percent a month earlier.
Within the category, factory-gate costs of copper, aluminum, lead and zinc surged between 3.9 percent and 38.7 percent. Steel producer prices also soared six percent in April.
Producer prices of coal added 2.1 percent, against the 1.4 percent rise in March while crude oil prices fell 4.3 percent last month after a 9.6 percent drop in March.
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