China's 2010 CPI up 3.3%, PPI up 5.5%

Source: Global Times
[10:13 January 20 2011]
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China's consumer price index (CPI) grew 3.3 percent year-on-year in 2010, according to figures released by the National Bureau of Statistics (NBS) on Thursday. The CPI in December grew 4.6 percent year-on-year.

The figure rose to a 28-month high, of 5.1 percent in November. It grew 4.4 percent year-on-year in October, 3.6 percent in September, 3.5 percent in August, 3.3 percent in July, 2.9 percent in June, and 3.1 percent in May compared with the same period last year. It increased by 2.8 percent in April, 2.4 percent in March and 2.7 percent year-on-year in February.

China's producer price index (PPI), a major measurement of inflation of wholesale prices, grew 5.5 percent year-on-year in 2010.

PPI rose 6.1 percent in November, 5.0 percent in October, 4.3 percent in September, 4.3 percent in August; grew 4.8 percent year-on-year in July, 6.4 percent year-on-year in June, 6.8 percent year-on-year in April, 5.9 percent in March and 5.4 percent year-on-year in February.

The prices of food, which accounts for a third of the basket of goods in China's CPI calculation, surged 7.2 percent year-on-year in 2010.

Compared with the 5.1 percent growth in November, CPI growth in December slowed down to 4.6 percent, reason to which analysts attribute to the slash in food prices.

Peng Wensheng, chief economist of China International Capital Corporation Limited (CICC), said that the inflationary pressure in the first two months of this year will still be large. And in January, CPI growth may hit 5.5 percent. Also, impacted by the coming of the Spring Festival, pressure may be even larger.

The central bank announced to raise the deposit reserve ratio on Janauary 14, aiming to curb price rebounds of agriculture-related.

The country, in 2010, had set a target to control CPI growth at about 3 percent. According to previous media reports, the target for this year may be of 4 percent.

Analysts said that preventing high inflation will still be the major target for 2011.