Experts: CPI in August may grow over 6%
Updated: 2007-09-10 14:58
The August consumer price index (CPI), to be released by the National Bureau of Statistics (NBS) tomorrow, is estimated by many institutions to have grown more than 6 percent to the highest level in a decade, the Beijing Morning Post reported today.
HSBC and China Construction Bank both predicted last week that the CPI for August will grow more than six percent. CITIC Securities said the growth will hit as high as 6.3 percent.
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Ma Jun, chief economist for Deutsche Bank Greater China, also said China's CPI for August will grow 6 percent year on year.
Soaring prices for foods such as pork is a major reason for the CPI growth. Pork prices have declined since the end of July, but prices for egg and vegetable rose sharply in August.
Bi Jingquan, vice-minister of the National Development and Reform Commission, said last Tuesday that the imbalance in the pork market will recover by mid-2008.
High inflation pressures also triggered more tightening policies.
The People's Bank of China, the nation's central bank, on September 6 raised the amount commercial banks must hold in reserve by 0.5 percentage points, for the seventh time this year.
In addition, the central bank issued 151 billion yuan (US$20 billion) of bills with a maturity of three years last Friday, further reducing the money available to banks for lending.
"The two policies aim at curbing liquidity," said Chen Jijun, an analyst with CITIC Securities. "The central bank is predicted to raise the interest rate again this year," Chen added.
The central bank has hiked interest rates four times this year to curb excessive liquidity.
The producer product index (PPI) for for manufactured goods grew 2.6 percent in August compared with the same month last year, up from July's 2.4 percent, the NBS announced today.
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