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BIZCHINA / News
CPI growth to slow in 2nd half
By Fu Jing (China Daily)
Updated: 2007-07-26 08:34
Consumer prices in China are projected to grow at a slower pace in the
second half of this year after rapid increases from January to June, an
official from the National Development and Reform Commission (NDRC) said
yesterday.
The level of the increase in the months ahead will depend on the harvest
of farm products this autumn, as food has been the main factor driving
this year's rise in the consumer price index (CPI), said Cao Changqing,
the NDRC pricing director.
His projection came following a 3.2 percent CPI growth in the first six
months and a 4.4 percent rise in June, the most rapid increase in 34
months. Up to 78 percent of the jump in the first six months was due to
rising food prices.
"We feel that prices are now climbing slowly, in a relatively steady
manner," Cao said.
He added that the nation's grain reserves are adequate.
China's Agriculture Minister Sun Zhengcai recently forecast a fourth
consecutive bumper harvest this year, and expects to meet the annual
target set for 2010, three years ahead of schedule.
The NDRC said the government's main role is to prevent the economy from
overheating.
Zhu Hongren, deputy director of the macroeconomic development department
under the NDRC, said the government will use economic and legal policy
tools to cool the growing pace of the economy.
Accelerating inflation also pushed real interest rates further into
negative territory, prompting regulators last week to raise interest
rates and slash taxes on interest income from bank deposits.
China's gross domestic product expanded by 11.9 percent in the second
quarter and by 11.5 percent in the first half of the year. Fixed-assets
investment in urban areas jumped 26.7 percent in the first half over a
year earlier, up from 25.3 percent in the first quarter, while industrial
output climbed 19.4 percent in June.
(For more biz stories, please visit Industry Updates)
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