CPI growth in August expected to exceed 3.5%

13:58, September 01, 2010      

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Pressure form rising agricultural product prices will lead to a new high in China's monthly Consumer Prices Index (CPI) growth in August, according to estimates by some financial institutions. In the coming year, China will face lasting influence from growing consumer prices.

The financial institutions predicted that CPI growth in August will be around 3.5 percent, exceeding July's 3.3 percent.

Li Huiyong, chief macro-economic analyst from Shanghai-based Shenyin-Wanguo Securities said that growing pork and vegetable prices will cause a large gain in food prices, which may be highest in four years.

"CPI growth of last month may hit 3.6 percent," Li said.

Industrial Bank's senior economic Lu Zhengwei also expected that CPI growth in August will surpass that of July.

Lian Ping, chief economist with the Bank of Communication, noted that inflation pressure will ease in the remaining months of this year.

He explained that as the market's concerns about global recovery still exist, the global bulk commodity market may remain weak.

Due to economic slowdown and overcapacity of industrial products, prices of some vital industrial products including steel, coal and cement have started to fall. However, pressures from rising food prices, wages and resources products still remain.

"Therefore, consumer prices will follow a mild downward trend in the second half of this year," he said.

By People's Daily Online


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