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China’s CPI zooms to record level in August

China’s CPI zooms to record level in August
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First Published: Tue, Sep 11 2007. 12 53 PM IST
Updated: Tue, Sep 11 2007. 12 53 PM IST
PTI
Beijing: China’s Consumer Price Index (CPI) went up by 6.5% in August due to spiralling food prices, registering the biggest monthly rise this year, affecting ordinary people.
The accumulative increase of the main gauge of inflation reached 3.9% in the first eight months this year, the National Bureau of Statistics (NBS) said.
Food prices went up by 18.2% in August and consumer goods prices 8%. Meanwhile, the prices of non-food products rose 0.9%.
Grain prices rose 6.4%, cooking oil 34.6%, meat and poultry 49%, eggs 23.6%, aquatic products 6.2%, and fresh vegetables 22.5%, but fresh fruit prices dipped by 3.3%, the NBS said.
The CPI went up by 5.6% in July, 4.4% in June and 3.5% year on year in the first seven months of 2007, affecting ordinary people.
But, Chinese planners say rising consumer price indices in the country do not indicate impending inflation, but “structural rises”.
The current price hikes in China are viewed as structural rises, emphasising that not every sector had seen price hikes, the Director General of the Department of Prices of the National Development and Reform Commission (NDRC), Cao Changqing said late last month.
Rise in the prices of foodstuffs, which account for about one third of China’s CPI, were the major driving force behind the index rise.
The CPI, for the sixth consecutive month in August rose by more than 3%, the government-set alarm level for the current year. Most economists predicted the figure for the whole year would stand at around 4%, or between 4% and 5%.
Over the past few years, China’s economy has seen “high growth, high efficiency and low inflation”. The CPI went up 1.8% in 2005 and up 1.5% in 2006. But the situation has changed dramatically this year.
Economists say price hikes for foodstuffs are a result of grain price rises.
Price hikes for foodstuffs were driven by cost rises, a result of mounting grain prices, while short supply is the additional factor for rapid rises of pork prices, Cao said.
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First Published: Tue, Sep 11 2007. 12 53 PM IST