China's CPI rises 3.8% in Q1 2012; PPI hits 27-month low

09 April 2012 07:52  [Source: ICIS news]

SINGAPORE (ICIS)--China’s consumer price index (CPI), a main gauge of inflation, rose by 3.8% year on year in the first quarter of 2012, data from the country's National Bureau of Statistics (NBS) showed on Monday.

March’s CPI rose by 3.6% year on year and was up by 0.4 percentage points from February, according to the data.

“The rise of fuel prices, which started from 20 March, is likely to have an impact on the CPI in the following months,” said Lu Zhenwei, chief economist at China Industrial Bank.

The country’s producer price index (PPI), which is a gauge of wholesale prices, declined by 0.3% year on year, hitting a 27-month low since January 2010, the data showed.

On a year-on-year basis, producers’ purchase prices increased by 0.1% in March, with their purchase prices of fuel rising by 5.1%, while those of raw chemicals declined by 1.9%, the bureau said.

“The government is aiming to promote stable monetary policy to balance economy growth and inflation,” Lu said.

Analysts predicted that a cut in the deposit reserve requirement ratio (RRR) for banks is likely to be implemented at the end of April.

By: Rachel Yang

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