China's half-year CPI growth estimated at 2.6%

09:43, June 24, 2010      

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Due to lower pressure of imported inflation, the government's macro-economic control policies and the expectations for a bumper summer grain harvest, the growth rate of China's consumer price index (CPI) over the first half of 2010 will be around 2.6 percent, an official from the National Development and Reform Commission (NDRC) told People's Daily.

The NDRC official said that the Europe sovereign debt crisis has led to a complicated global economic situation. Falling commodity prices in the world market has eased the pressure of imported inflation in China.

Meanwhile, in the domestic market, prices of vegetables and other agricultural products, which experienced large increases earlier this year, have declined significantly. Since the end of May, corn and rice prices have returned to stability and showed a slight drop.

"The growth rate of China's consumer price index over the first half of 2010 will be around 2.6 percent," he said.

Single month CPI growth rate will peak in July, said Dong Xian'an, chief macro analyst of Industrial Securities.

China International Capital Corp. chief economist Ha Jiming said that in current situation, month-on-month CPI growth can better reflect the inflation pressure.

"May CPI growth was higher compared with the same period of 2009, but was lower than April, showing a lower inflation pressure," he said.

The deepening of the E.U. debt crisis has resulted a stronger dollar, and stock markets in major developed countries dropped over 5 percent in May. Commodity prices in the world market also declined dramatically.

In the domestic market, prices of steel, copper and aluminum dropped as much as 9 percent in May, while coal prices kept generally stable.

Due to falling raw material prices and weakening tail-raising factors, China's producer price index (PPI) will peak in June, Ha estimated.

By People's Daily Online

(Editor:祁澍文)

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