BIZCHINA / Center |
CPI hits new high of 7.1% in January(Xinhua/Agencies)
Updated: 2008-02-19 10:08 BEIJING -- China's inflation accelerated in January to 7.1 percent -- its rate highest in a decade -- amid snowstorms that fueled a spike in food costs, according to data reported Tuesday by the National Bureau of Statistics (NBS). The figure was as most market analysts expected but slightly lower than China's central bank forecasts. The Bank of China forecast the CPI for January would jump 7.5 percent or higher. So far, the rise appears to be confined to food, according to the data released Tuesday. The bureau said food prices ballooned 18.2 percent in January from a year earlier, grain prices rose 5.7 percent and cooking oil prices increased by 37.1 percent. Pork prices, which had been blamed as the major factor driving up CPI figures throughout the later half of last year, soared 58.8 percent in January, the bureau said. Non-food prices, however, rose only 1.5 percent, it said. The CPI rose 6.8 percent in urban cities, compared with 7.7 percent in rural areas. The January's CPI figure was the highest level since 1997. CPI, the main gauge of inflation, once increased by 7.0 percent in December of 1996 and 6.9 percent last November. Currency gains and curbs on bank lending may be favored this year as tools to curb inflation. The government has also imposed price controls for food and energy. The financial system is flooded with cash from record trade surpluses, threatening to stoke inflation that has soared since last year on food and fuel. The surplus jumped 23 percent in January from a year earlier to $19.5 billion. Money supply rose 18.9 percent. Snowstorms from mid-January closed factories and boosted prices by destroying crops and disrupting deliveries. Accelerating producer prices show pressure for inflation to stay high. Producer prices, the cost of goods as they leave the factory, jumped 6.1 percent in January, the biggest gain in more than three years, on oil and raw materials. Economists expect the government to keep raising banks' reserve requirements, a Bloomberg survey last month showed. The central bank has ordered lenders to set aside more deposits as reserves on 11 occasions since the start of last year, pushing the ratio to 15 percent, the highest ever. Economists are split on whether interest rates will rise this year after six increases in 2007, the survey showed.
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