China's Nov CPI up 4.2%, PPI up 2.7%

Updated: 2011-12-09 09:41


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China's Nov CPI up 4.2%

BEIJING - China's consumer price index (CPI), a main gauge of inflation, rose 4.2 percent year-on-year in November, further weakening from 5.5 percent in October due to falling food prices, the National Bureau of Statistics (NBS) said on Friday.

November's inflation rate marked a 13-month low, according to NBS data.

On a monthly basis, the cost of living dipped 0.2 percent in November, the NBS said in a statement at its website.

"November's reading indicates that inflation is weakening faster than I had anticipated," said Zhang Monan, a deputy researcher with the Economic Projection Department of the State Information Center.

Before the NBS announcement, Zhang said she expected the November inflation rate to reach just below 5 percent, while many economists projected the CPI growth to fall between 4.2 percent to 4.4 percent year-on-year.

Zhang said the lower-than-expected inflation reading was a result of the country's macroeconomic control policies, particularly the monetary tightening policies put into place in the first half of the year.

"The monetary tightening in the first half of this year had an effect on the CPI figure," she said, adding that a contraction in domestic and overseas demand, as well as falling commodity prices in the global market, also curbed price increases in November.

Food prices, which account for nearly one-third of the basket of goods used to calculate the CPI, went up 8.8 percent in November from a year earlier, driving up inflation by 2.7 percentage points, according to the NBS.

The carryover factor, which measures the impact of last year's prices on year-on-year changes in this year's prices, moderated in November and contributed only half a percentage point to November's CPI growth, according to NBS data.

Taking the first 11 months together, the CPI rose 5.5 percent year-on-year in January-November, well above the government's full-year inflation control target of 4 percent.

China's CPI hit a 37-month high of 6.5 percent in July this year.

China's Nov CPI up 4.2%, PPI up 2.7%

China's PPI up 2.7% in Nov

Growth in China's producer prices decelerated to the lowest pace in nearly two years as market demand fell on future economic uncertainties.

China's Producer Price Index (PPI), a main gauge of inflation at the wholesale level, rose 2.7 percent in November year-on-year, the National Bureau of Statistics (NBS) said Friday.

The reading eased significantly from October's 5-percent growth, which was expected to stay around 3.6 percent, according to previous estimations.

On a month-on-month basis, China's PPI fell 0.7 percent from October, the NBS said in a statement on its website.

Producer purchase prices grew 5.1 percent year-on-year in November and were down 0.7 percent from a month ago, said the NBS.

In the first eleven months of the year, the PPI climbed 6.4 percent year-on-year, while producer purchase prices rose 9.7 percent from a year earlier.

The sharp decline in producer prices growth was a result of a higher comparison basis in the corresponding period last year and a significant decrease in both international prices of raw materials and domestic demand, the statement said.

The lower-than-expectation PPI figure was mostly triggered by a market panic, said Chen Kexin, an analyst with the Distribution Productivity Promotion Center of China Commerce.

"Uncertainties in external markets and risk of a further recession have turned the market toward a more prudent mood," he said.

Sheng Hongqing, chief economist with Everbright Bank, said the December PPI may drop to zero or below as market demand further dips and the real economy weakens faster than expected.

Chen said there is still a possibility for a rebound in PPI in the future if market sentiment can be encouraged by more favorable news.

"But so far, there is no sign of that," he said.

China's consumer price index (CPI), a main gauge of inflation, rose 4.2 percent year-on-year in November, further weakening from 5.5 percent in October, said the NBS.

China's Nov CPI up 4.2%, PPI up 2.7%

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