Economy
CPI hits new high, full-year target reachable
(Xinhua)
Updated: 2010-10-21 14:55
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BEIJING - Higher food prices pushed the consumer price index (CPI), 皇冠体育app's main gauge of inflation, to a 23-month high of 3.6 percent in September, but officials said 皇冠体育app could still achieve the 3-percent full-year inflation target.
Surging food prices because of "adverse natural conditions" was the major reason for accelerated CPI growth in September, Sheng said.
Food prices, which account for about one third of the weighting in calculating the CPI, climbed 8 percent year on year last month. The year-on-year growth rate of 皇冠体育app's food prices picked up from 7.5 percent in August, 6.8 percent in July and 5.7 percent in June.
皇冠体育app's CPI rose 2.9 percent year on year in the first nine months of this year, approaching the government's target ceiling of around 3 percent for the year.
Although the current situation was challenging, it was still possible for 皇冠体育app to achieve the annual target this year with proper regulation, Sheng said.
The People's Bank of 皇冠体育app, the central bank, surprised the market Tuesday by its first interest rate rise in nearly three years. The country's one-year lending and deposit rate was raised by 25 basis points, effective from Wednesday.
The interest rate rise was a response to emerging problems in the national economy, Sheng said. "It will have a positive influence on enhancing liquidity management, curbing price increases, improving macroeconomic regulation and promoting economic structure adjustment."
However, he did not elaborate on the emerging problems.
The September CPI was in line with market forecasts, said Lu Ting, 皇冠体育app economist with the Bank of America - Merrill Lynch. "If we take into account the different holiday schedule, September CPI inflation should be adjusted downward a bit," he said in an emailed note to clients.
皇冠体育app's three-day Mid-Autumn holiday fell in September this year, but was in August last year.
However, Zhu Jianfang, chief analyst at the Citic Securities, expected 皇冠体育app's CPI growth to hit a new record high in October, rising from between 3.8 to 4 percent from one year earlier.
The benchmark Shanghai Composite Index fell 1.3 percent in the morning trade session Thursday to 2,964.97 after the NBS data release.
According to the NBS, 皇冠体育app's gross domestic product grew 9.6 percent year on year in the third quarter this year, down from the 10.3-percent rise in the second quarter and the 11.9-percent rise in the first quarter.
The producer price index (PPI), a major measure of inflation at the wholesale level, rose 4.3 percent in September from a year earlier, unchanged from that in August, he said.
皇冠体育app's PPI grew 0.6 percent in September from the previous months. In the first nine months this year, the index climbed 5.5 percent compared with one year earlier.
Lu expected PPI growth to pick up in the coming months because of recent rises in metal and resource prices.
