In­fla­tion edges up in Oc­to­ber

China Daily (Canada) - - TOP NEWS - ByWANG YIQING wangy­iqing@ chi­

China’s con­sumer price in­dex grew by 2.1 per­cent in Oc­to­ber on a year-on-year ba­sis, up from 1.9 per­cent in Septem­ber, the Na­tional Bureau of Statis­tics said on Wed­nes­day.

The CPI, a key gauge of in­fla­tion, had ended four con­sec­u­tive months of de­cline in Septem­ber, when it rose to 1.9 per­cent. The 2.3 per­cent year-on-year fig­ure reached in April was tied with Fe­bru­ary and March for the high­est level since July 2014.

Con­sumer in­fla­tion, how­ever, de­clined by 0.1 per­cent in­Oc­to­ber­month-on- month.

YuQi­umei, a se­nior statis­ti­cian at theNBS, said the­main rea­son for the CPI’s rapid year-on-year growth is the com­par­a­tively low CPI dur­ing the same pe­riod last year.

Food prices rose by 3.7 per­cent year-on-year in Oc­to­ber, while they rose by 3.2 per­cent in Septem­ber. Vegeta­bles rose by 13 per­cent year-onyear, fruit by 6 per­cent and pork by 4.8 per­cent.

“On a month-on-month ba­sis, the de­cline of the CPI in Oc­to­ber is mainly a re­sult of the fall in food prices.” Yu said.

Dueto the suf­fi­cientsup­ply of fresh food on the mar­ket re­cently, many prices dropped month-on-month in Oc­to­ber, in­clud­ing eggs by 4 per­cent, pork by 2.8 per­cent, ma­rine prod­ucts by 1.8 per­cent, fruit by 1.7 per­cent and vegeta­bles by 0.9 per­cent.

Other non­food prices in­clud­ing med­i­cal treat­ment, ser­vices and cloth­ing in­creased dur­ing the month, said NBS.

The pro­ducer price in­dex, which mea­sures the cost of goods at the fac­tory gate, and may in­flu­ence the CPI, was re­leased on the same day by the NBS. In Oc­to­ber, the PPI grew 1.2 per­cent year-onyear, which is the high­est growth since De­cem­ber 2011 and is far be­yond mar­ket ex­pec­ta­tions.

The rapid price in­crease in five ma­jor in­dus­tries — in­clud­ing coal min­ing and wash­ing, pe­tro­leum pro­cess­ing, and pe­tro­leum and gas ex­trac­tion— mainly con­trib­uted to the PPI’s rapid growth this month, ac­cord­ing to the NBS.

Deng Haiqing, chief econ­o­mist with JZ Se­cu­ri­ties, pre­dicted that China’s CPI will be in the 2 to 2.5 per­cent range in the next three months, given the es­tab­lished record and low base.

“It seems un­likely that the cen­tral bank will in­crease the in­ter­est rate in the short term,” Deng said.

Ren Zeping, chief econ­o­mist of Founder Se­cu­ri­ties, said China’s CPI is likely to fluc­tu­ate around 2 per­cent and PPI growth likely will fur­ther ex­pand.

“Pol­icy should be turned to­ward curb­ing bub­bles and con­trol­ling risks” Ren said. “China’s economy will step into light stag­na­tion from the fourth quar­ter of 2016 to the first quar­ter of 2017.”

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