CPI Consumer Price Index News
- CPI forecast at 4.5-4.6%
Date: 26-Nov-2007 Sources: (Shenzhen Daily)
CHINA'S consumer price index (CPI) was expected to rise 4.5 percent to 4.6 percent for 2007, which would indicate a moderate and tolerable inflation, the country's top statistician Xie Fuzhan said Thursday.
Xie, head of the National Bureau of Statistics, added that the monthly rate of CPI would likely linger at 6 percent or so for several months yet.
CPI, a major inflation measurement, hit 6.5 percent in August, 6.2 percent in September and 6.5 percent again in October, all well above the government-set alarm level of 3 percent.
Xie said the CPI rises were driven up mainly by price hikes for foodstuffs, which were mainly caused by rising production costs.
According to Xie, global price rises for crude oil fuelled price rises for industrial products. Meanwhile, price rises for nonferrous metals and iron ores also contributed to the CPI increase.
'Substantial price rises for real estate and equities translate to higher risks on economic growth in the long term,'he said.
To stabilize the national economy, Xie believed, the volume of gross domestic product (GDP) should be put under control and the GDP growth rate should be brought back to within 10 percent through use of both monetary and fiscal policies.
According to Xie, the government will continue a moderately tight macro-economic policy for a short period of time to utilize monetary policies to control liquidity and to prevent credit and investments from growing too fast.
Xie forecast China's GDP growth at 11.5 percent for the whole of this year.
He said the exchange rate of China's currency, the yuan, should be more flexible.
On Nov. 19, Premier Wen Jiabao said in Singapore that China would continue to improve the yuan exchange rate mechanism and gradually make the yuan convertible under capital account.
Last Sunday, the central bank governor Zhou Xiaochuan said if necessary, the nation would consider widening the yuan's trading band.
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