CPI set to rise on food prices

09:36, February 15, 2011      

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PRICES of most of the 29 food stuffs tracked by the National Bureau of Statistics in China's 50 cities increased early this month, putting more pressure on authorities to control inflation.

Banana led with a 10.1 percent price rise over 10 days from February 1, compared with the previous 10 days. Pork prices climbed 3.5 percent.

Over the same period the prices of flour, peanut oil, seed oil and cucumber declined between 0.2 percent and 0.5 percent from those of the previous 10 days, the bureau said yesterday.

The bureau is set to release data for the Consumer Price Index, the main gauge of inflation, today. The current inflationary spiral was mainly fueled by rising food prices, observers said.

Analysts widely expect the index to climb above 5 percent due to costly food amid bad weather and rising demand before the Spring Festival holiday. Wang Qing, a Morgan Stanley economist, forecast a 5.2 percent rise in the CPI.

China's consumer prices grew by a slower 4.6 percent year on year in December after hitting a 28-month high of 5.1 percent in November.

China surprisingly announced an interest rate hike on February 8. It was the third hike since October.

Source:Shanghai Daily
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