China January CPI up 1.5%, chemical prices rise

11 February 2010 03:55  [Source: ICIS news]

GUANGZHOU (ICIS news)--China recorded an annual inflation of 1.5% in January, representing the third consecutive month of increase in the consumer price index (CPI), government data showed on Thursday.

CPI, which tracks the movement of retail prices, had been registering year-on-year declines from February to October 2009.

Meanwhile, the country’s production price index (PPI) – a gauge of wholesale prices, jumped 4.3% on year in the first month of 2010, continuing the price uptrend in December last year after 12 straight months of price falls, based on data released by the National Bureau of Statistics (NBS).

In January 2010, prices of raw chemicals grew by 4.2% year-on-year while those of polystyrenes and polybutadiene rubber jumped 30.6% and 43.1%, respectively, NBS data showed.

Crude oil prices in China surged 69.7% while cost of gasoline increased 16.6%. Diesel prices also rose 15.0%, NBS said.

China would likely continue recording inflation over the next six months as an offshoot of the excessive bank lending last year, analysts said.

People’s Bank of China, the country’s central bank, may hike interest rates no later than the second quarter of the year, they said.

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By: Fanny Zhang
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