China's CPI rises 4.9% in January, PPI up 6.6%

15 February 2011 06:18  [Source: ICIS news]

GUANGZHOU (ICIS)--China’s inflation accelerated in January as both retail and wholesale prices headed north, with food prices registering a 10.3% rise from a year ago, according to official data released on Tuesday.

The consumer price index (CPI) gained 4.9% year on year in January, while its producer price index (PPI) increased by 6.6% year on year, data from the National Bureau of Statistics (NBS) showed. The statement did not give reasons for the rise in inflation.

In December, the annual figure for CPI and PPI was 4.6% and 5.9% respectively.

Wholesale prices of crude increased 5.4% month on month in January, while that of butadiene rubber (BR) and polystyrene (PS) foam gained 3.9% and 2.3% respectively over the previous month.

Analysts said that inflation would continue to increase throughout the year, but was expected to stay under control as the government was taking effective currency measures to cool down the economy.

The central bank raised interest rates by 0.25 percentage points on 9 February, its third increase since October.

“Overall growth would gradually slow down and inflation pressure would therefore be relieved,” said Xie Yaxuan, an economist at Shenzhen-based brokerage China Merchants Securities.

Xie said China may raise interest rates one or two more times this year, depending on the rate of inflation.

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By: Fanny Zhang
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