Central bank: China faces inflation pressures

Updated: 2006-11-14 21:43

BEIJING -- China's central bank said Tuesday that inflation pressures still exist despite lower consumer price index (CPI) in the first three quarters.

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Prices for both consumer goods and production materials have risks of going up in the future, said a report on currency policy in the third quarter released Tuesday by the central bank.

China's CPI rose 1.3 percent in the first nine months, 0.7 percentage lower than the same period last year.

The central bank said that China's consumer goods would be in oversupply in the future period. However, as China speeds up its pricing reform on energy products, prices of water, electricity, oil and gas would continue to be raised.

Price hike of crude oil and non-ferrous metal in the international market would push the prices of concerned products high, says the report.

Stricter requirement on safe production and social security would increase costs of companies and the strong momentum of investment would bring more pressures for price rise, it says.

A survey by the central bank in the third quarter shows that 44.2 percent of the urban depositors expect the price level to rise, 6.8 percentage points higher than the figure in the second quarter.

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