Balancing price indices
The continued deviation between consumer and producer price indices is another thorny problem for policymakers, especially the monetary authorities.
The consumer price index rose 2.4 percent year-on-year in April, up from 2.1 percent in March, according to the National Bureau of Statistics. The producer price index, on the other hand, fell by 2.6 percent in the same month, the 14th consecutive monthly fall. But the deviation is not surprising given the rising food and housing-related costs and the weak economic growth.
A 4 percent gain in food prices, up from 2.7 percent in March, has contributed to the consumer price rise, as the fall in meat prices as a result of the H7N9 flu outbreak has been offset by rising vegetable prices. Meanwhile, the policy-induced briskness in new house transactions has pushed up housing-related prices, another major component of the CPI basket.