Rise in prices expected: survey

By Chen Dujuan Source:Global Times Published: 2012-12-18 23:45:09

A worker slices beef at a market in Sanya, South China's Hainan Province Tuesday. The average price of beef was 35 percent higher Monday than the same time last year, according to a farm produce price monitoring index released by Xinhua Tuesday. Photo: CFP
A worker slices beef at a market in Sanya, South China's Hainan Province Tuesday. The average price of beef was 35 percent higher Monday than the same time last year, according to a farm produce price monitoring index released by Xinhua Tuesday. Photo: CFP

 

A lower number of Chinese urban households believe current price levels are excessively high, but more people believe that prices will rise in the next quarter, a central bank quarterly survey said Tuesday.

According to the People's Bank of China (PBC) survey, which covered 20,000 urban households in 50 cities nationwide, 58.5 percent of urban households believe that prices are "too high to accept" in the fourth quarter, 2 percentage points lower than in the previous quarter and 10.2 percentage points lower than one year ago.

China's consumer price index (CPI), a major gauge of inflation, rose to 2 percent in November, after hitting a 33-month low of 1.7 percent in October, according to the National Bureau of Statistics.

Due to higher satisfaction with current prices, people are more willing to consume compared with the beginning of the year, the PBC survey showed.

However, 41.7 percent of the households surveyed expect prices to rise in the next quarter, up 4.7 percentage points from the third quarter's survey result.

China's CPI will remain stable in the short run and inflation is expected to grow at 2.6 percent for the whole of 2012, Sheng Hongqing, chief macroeconomic analyst at China Everbright Bank, told the Global Times Tuesday.

However, the country will face pressure from rising prices from the beginning of 2013 and inflation will rise further from May to September due to increased investment, Sheng said.

"The price increase next year will be mild rather than steep," Wang Yuwen, a researcher with Shanghai-based Bank of Communications, told the Global Times Tuesday.

Slow but steady economic recovery in China will result in increasing domestic demand, which will push prices up, Wang said. The bank expects China's GDP to grow by 8 to 8.5 percent in 2013, higher than the government's 7.5 percent annual target for 2012.

Price reforms for resource-based products such as electricity and natural gas have also driven up prices, she said.

China is expected to set an inflation target of 3.5 percent for 2013, the official China Securities Journal reported Tuesday, citing sources. The country's inflation target for 2012 was 4 percent.

According to a separate survey released Tuesday by the PBC, 19.8 percent of bankers expect monetary policy to ease in the next quarter, up by 13.9 percentage points from the survey last quarter.

However, E Yongjian, another researcher with Bank of Communications, said that given the need to curb overheating investment and prevent prices from rising too fast, it is unlikely that there will be monetary easing during the upcoming year.



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