Industrial Production News
- Producer prices lose steam
Date: 14-Mar-2007 Sources: (Xinhua Online)
China's factory-gate inflation grew at a slower pace in February as oil prices fell and gains in non-ferrous metal costs declined - signaling potential good news for consumers.
Producer prices rose 2.6 percent last month from a year earlier after gaining 3.3 percent in January, the National Bureau of Statistics said yesterday. Growth slackened for the first time in three months.
'Milder growth in wholesale prices could help curb consumer product inflation,' said Li Mingliang, an analyst at Haitong Securities Co.
'As macroeconomic controls continue to rein in industrial gluts, we expect factory-gate inflation to hover around three percent in the first half of this year.'
The central bank has raised interest rates, sold bonds and asked banks to set aside more money as reserves to soak up cash and dampen lending.
'Still, the moderation of inflation is a matter of supply and demand in the market,' Li said.
China's consumer price index rose 2.2 percent in January from a year earlier, the statistics bureau said last month. The increase exceeded the combined 1.5 percent growth of last year, led by a surge in heavily weighted food prices.
The government has cut taxes, raised the minimum wage and increased spending to improve education, welfare and health care in a move to boost consumption. The bureau is scheduled to announce February's consumer price inflation today.
Among the key components of the factory-gate guage, the producer price of crude oil fell 7.7 percent last month from a year earlier after rising 4.6 percent in January, contributing partly to the decline in the overall gain.
Non-ferrous metal producer prices gained 14.7 percent last month, a decrease from the 19.9 percent rise in January.
Gasoline prices climbed 8.5 percent year on year, and the price of diesel grew 10.5 percent from a year earlier. Producer prices of coal increased 2.1 percent, the statistics bureau said.
The country plans to improve energy efficiency by 20 percent by 2010. China last year cut the amount of energy used to produce each unit of gross domestic product by 1.23 percent, missing the four percent target set by the state.
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