National Bureau of Statistics data for the first half of the year show China's GDP grew 6.3 percent in line with expectations, and the consumer price index (CPI) increased 2.2 percent year-on-year, lower than the CPI target set in the Government Work Report, while per capita dispensable income grew 6.5 percent after adjusting for inflation－0.2 percentage points higher than the GDP growth.

The increase in the CPI in the first half was 0.4 percentage points higher than in the first quarter thanks mainly to prices of vegetables increasing 9.2 percent, pork 7.7 percent and fruits 16.1 percent.

Since people are most sensitive to fluctuations in food prices, they feel the pressure of inflation, not least because despite the decline in vegetable prices in June, the prices of pork and fruits continued to rise rapidly－with fruit prices increasing 42.7 percent in June.

Climate change-induced extreme weather conditions and the African swine fever epidemic were the main reasons behind the hike in food prices. Heavy rainfall in southern China has either damaged the fruits or made picking and transportation very difficult, reducing the total output this year compared with the previous years. And the pig stock has declined because many animals were culled after being infected with Africa swine fever, which caused pork prices to rise dramatically. In addition, the rising fruit packaging and swine feed costs also contributed to the price hike.

Despite such headwinds, the CPI growth rate remained below the 3 percent annual target, which indicates a low inflation pressure.

The CPI increase could reduce the "actual growth" of people's average income, though. From January to June, per capita dispensable income grew 8.8 percent year-on-year, 0.1 percentage point higher than the first quarter. Even after adjusting for inflation, per capita dispensable income growth was 6.5 percent－0.2 percentage points higher than GDP growth. To be specific, salary incomes, which account for 57.5 percent of the total dispensable income in China, increased 8.7 percent.

Income decides consumption, and the continuous growth in income will keep driving up consumption. In the first half, per capita nominal expenditure increased 7.5 percent－after adjusting for inflation, the figure would be 5.2 percent. The total retail sales of consumer goods increased 8.4 percent year-on-year, 0.1 percentage point higher than the first quarter. Especially, the growth rate in June accelerated to 9.8 percent, the highest since April 2018.

In the first half of the year, consumption growth contributed to 60.1 percent of China's GDP growth. And since the CPI increased gradually compared with the continuous growth of per capita income, people have been willing and able to spend more. And there is little doubt that consumption will play the leading role in boosting China's economic growth.

But it is important that the CPI increase remains below 3 percent for consumption to rise and the economy to grow. Which is exactly what happened in the first half, as despite the drastic increase in fruit and pork prices, CPI growth remained moderate.

Still, the government should tighten control over the macro-economy and take measures to promote the production and supply of necessities, so as to ensure the price hike doesn't make people's daily lives difficult or slow down economic growth.

Pork price is likely to be the major driver of the CPI in the near future, but fruit prices may come down slowly with the increase in supply in the next couple of months. Given that demand in the international market is sluggish, and will remain so for some time, the pressure of imported inflation is quite limited.

Therefore, the CPI increase is not likely to breach the 3 percent annual target, and there's no evident pressure of inflation, which will help the authorities to achieve the major economic development targets this year.

The author is a research fellow at the National Academy of Economic Strategy, Chinese Academy of Social Sciences. The views don't necessarily represent those of China Daily.