China’s inflation eases, but target still elusive

By Xinhua,

Beijing : Inflationary pressure in China continues to ease, thanks to falling farm prices, but the target of containing inflation to 4.8 percent looks elusive, market analysts said Sunday.

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The consumer price index (CPI), which hit 8.7 percent for February and 8.3 percent for March, would probably be around 8 percent for April over the same month last year, said Chen Jijun, an analyst with state-owned investment company Citic Securities.

However, the goal of 4.8 percent remained a difficult target to hit, said chief economist with the National Bureau of Statistics (NBS), Yao Jingyuan.

Although, prices of grain remained high, those of vegetables dropped significantly last month on abundant supply, in some cases falling by 50 percent.

Zhang Ying, chief analyst with Hujie Investment, forecast the growth in the index would continue to slow after the 11-year peak in February.

The CPI surged eight percent in the first quarter, 5.3 percentage points higher than the same period last year, indicating continuing inflationary pressures, he said.

Food prices, the key driver of the CPI, remained high with pork prices rising 63 percent year on year, said Yao.

External factors confounded the problem. International crude prices more than doubled in less than five months, affecting domestic energy prices.

As world economies integrate, global grain price rises also affected the domestic market, the NBS economist said.