Higher inflation around the corner?

Editor's Note: Economists dished out their own forecasts before the official release of the August consumer price index, a key measurement of inflation. Most have put their CPI estimates above 2 percent year-on-year, higher than July's 1.8 percent.

Although it is too early to say inflation is looming large again, after it was brought down from 4.5 percent in January, the loss of harvests for farmers in many countries in the world is almost certain to drive up global food prices. So no one can say CPI's rise in August was but an independent phenomenon or that the index won't climb still higher in the next few months. How high China's CPI will be at the turn of the year is really hard to tell.

Putting things in this perspective, the central government still has a couple of months before inflation becomes worse, to increase the money supply and boost the economy's short-term growth. The National Development and Reform Commission's latest approval of a number of cities' urban rail projects, worth more than 700 billion yuan ($110 billion) in total, is an example of the government strategy at work.