China's November CPI rises 0.6%, ending nine months of fall

10:23, December 11, 2009      

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China's consumer price index (CPI), a main gauge of inflation, rose 0.6 percent year on year in November, the National Bureau of Statistics (NBS) announced Friday.

It is the first monthly growth since January, before the CPI dropped 1.6 percent in February.

The producer price index (PPI), a major measure of inflation at the wholesale level, declined 2.1 percent in November from a year earlier, according to the NBS.

The rate of decline was 3.7 percentage points lower than that in October, which was down 5.8 percent year on year.

The CPI fell 0.9 percent in the first 11 months, compared with a 6.3 percent rise in the corresponding period last year.

Retail commodity prices in urban areas were up 0.4 percent and in rural areas they rose 0.9 percent year on year last month, Sheng Laiyun, an NBS spokesman, told a press conference.

Food prices, which account for about a third of the CPI, went up by 3.2 percent year on year in November, while non-food prices dropped 0.7 percent.

The rise in commodity prices was mainly brought about by rising food prices and housing costs, including rents, construction expenses and property management fees, said Sheng.

Housing costs rose 0.8 percent month on month in November this year, according to the NBS. Property prices are not included in the CPI.

The rise in CPI is in line with analysts' forecasts, Wang Tao, analyst with the UBS Securities, told Xinhua.

Inflation expectations were strong, due to this year's credit boom and a rapid growth in property prices, said Wang.

"However, China is not facing an inflation problem," she told Xinhua, predicting that the CPI growth for next year would be around 3 percent.

The government would keep food prices rising next year so as to encourage farm production, but prices of manufactured products would remain low as a result of the weak external demand, Wang said.

Source: Xinhua
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