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CPI likely to continue growing

By Gao Yuan (chinadaily.com.cn)
Updated: 2010-10-18 17:20
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Economists say that the country's consumer price index (CPI) in September is likely to maintain high growth, Shanghai Securities News reported Monday.

Zhu Jianfang, chief economist at CITIC Securities, estimated that China's CPI in September would increase 3.6 percent compared to the same month a year ago. The figure was 0.5 percent higher than August.

"The persistent growth of food prices is the key factor that pushes CPI on the rise," said Zhu Baoliang, deputy director of the Economic Projection Department at the State Information Center.

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Commodity prices are generally high in July, August and September each year, said Zhang Yongjun, an analyst at the China Center for International Economic Exchanges. He said an expected downturn in commodity prices may occur in the fourth quarter.

A report released by the Bank of Communications forecast that the CPI would drop in the fourth quarter. But the report also said that pressures from climbing food prices and rising wages could weaken the downward tendency.

Meanwhile, Tang Min, deputy secretary-general at the China Development Research Foundation, estimated that counter-inflation measures, including monetary and administrative policies, would be carried out in the fourth quarter or no later than the first quarter of 2011.

Raising interest rates is probably the best method to cope with inflation expectation, said Yuan Gang of the Center for China in the World Economy at Tsinghua University.