CPI Consumer Price Index News
- CPI may accelerate to highest in decade
Date: 11-Sep-2007 Sources: (Shenzhen Daily)
THE consumer price index (CPI) probably accelerated to a decade high as food costs soared and the nation's second-highest monthly trade surplus pumped cash into the economy.
Consumer prices is expected to rise 5.9 percent in August from a year earlier, according to the median estimate, after gaining 5.6 percent in July. Inflation figures are due at 10 a.m. today.
The highest consumer price index since January 1997 would add pressure on the government to prevent price increases spreading beyond food. Premier Wen Jiabao said last week that the economy is at risk of overheating and the central bank ordered lenders to set aside larger reserves for the seventh time this year.
'The central bank has turned more hawkish and concerned about inflation widening from food to other areas,'said Stephen Green, senior economist at Standard Chartered Bank Plc. in Shanghai. Green sees another interest rate increase this year.
Pork prices in China, the world's biggest producer and consumer of the meat, have soared because of a pig shortage linked to disease and increased feed costs. Food accounts for a third of the consumer price index and meat for 7 percent.
Consumer complaints about rising food prices and inflation outpacing returns on bank deposits are a concern for the government.
'This is getting ridiculous,'said Liu Dongqing, a 23- year-old factory worker as he handed over 10 yuan (US$1.33) for a 'catty?- 0.6 kg - of pork that previously cost 7 yuan at a market in the southern factory town of Shenwan in Zhongshan City, Guangdong Province, last week. 'Sooner or later I won't be able to afford to eat pork.'
'Food is becoming so expensive but my salary is not rising as much,'said Chen Xiaofang, a 28-year-old waitress in Zhuhai, Guangdong. 'The government should do something to control prices.'
China's economy, the world's fourth largest, expanded 11.9 percent in the second quarter from a year earlier, the fastest pace in more than 12 years. Producer prices rose 2.6 percent in August, accelerating for the first time in four months, after gaining 2.4 percent in July, the national statistics bureau said yesterday.
Meanwhile, the producer price index (PPI) for manufactured goods was up 2.6 percent in August over the same period of last year, the National Bureau of Statistics said yesterday.
The monthly increase was 0.2 percentage points higher over that of July, said the bureau.
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