China's April CPI up 5.3%, PPI up 6.8%

14:03, May 11, 2011      

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China's consumer price index (CPI), a main gauge of inflation, rose 5.3 percent in April from a year ago, the National Bureau of Statistics (NBS) said on Wednesday.

The April figure was down 0.1 percentage points from March's 32- month high of 5.4 percent, according to the NBS.

China's producer price index (PPI), a main gauge of inflation at the wholesale level, rose 6.8 percent in April from a year ago, down 0.5 percentage points from the previous month.

NBS spokesman Sheng Laiyun said food prices, which account for nearly a third of the basket of goods in the nation's CPI calculation, surged 11.5 percent year on year. Non-food prices rose 2.7 percent from a year earlier.

China has adjusted the weight of items in its CPI calculation from the start of the year -- with the food weighting pushed down 2.21 percentage points and property-related weighting up 4.22 percentage points.

Last month, consumer prices rose 5.2 percent in urban areas and 5.8 percent in the rural region, compared with a year earlier, said Sheng.

The April CPI was above the government's target of 4 percent for the year.

Government measures to contain vegetable prices are having an effect, said Wang Xiaoguang, a research fellow at the Policy Advisory Department of the Chinese Academy of Governance, adding that he expected CPI to drop slightly in the second quarter from the first quarter's 5 percent growth.

China's quarterly inflation downward trend would continue, said Wang, forecasting a lower than 4 percent quarterly CPI growth rate in the third quarter and less than 3 percent growth in the forth quarter.

During the week of May 2 to 8, the average wholesale prices of 18 types of vegetables dropped 3.1 percent from the previous week, China's commerce ministry said in a statement on its website Tuesday. The decline was 1.1 percentage points lower than that of the previous week.

Wang played down the direct impact of increasing money supply on CPI growth, claiming that inflation would have already hit double digits if it had a direct link with the money supply.

The broad money supply (M2), which covers cash in circulation and all deposits, increased 16.6 percent year on year as of the end of March, 0.9 percentage points higher than that as of the end of February. The increase exceeded the government's target ceiling of 16 percent for 2011 set in a government work report released in March.

Source: Xinhua
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