Rising commodity prices drive up China’s CPI - analyst

10 September 2012 08:31  [Source: ICIS news]

SINGAPORE (ICIS)--Rising commodity prices have largely driven up China’s consumer price index (CPI) in August and CPI is expected to remain above 2% in the fourth quarter, said Li Daxiao, the institute director of Yingda Securities, on Monday.

The pressure of inflation will continue to persist, Li Daxiao added.

“The inflection point has been come, and CPI will keep rising in the fourth quarter,” said Li Xunlei, chief economist at Haitong Securities.

China’s CPI, a main gauge of inflation, rose by 2% year on year in August 2012 and up by 0.2 percentage point from July, data from the country's National Bureau of Statistics (NBS) showed on 8 September.

The country’s producer price index (PPI), which is a gauge of wholesale prices, declined by 3.5% year on year, hitting a 34-month low since November 2009, the data showed.

“The poor PPI data indicates that industrial products prices have dropped further and economic activities are still weakening,” said Ha Jiming, vice chairman of Goldman Sachs Investment Management Department in China.

The drop in PPI indicates that the real economy remains in the contraction, analysts said.

By: Viola Pan
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