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China's inflation at 18-month high

05-11-2010 18:59 BJT

China's consumer price inflation edged up to an 18-month high in April. The National Bureau of Statistics told a news conference in Beijing on Tuesday that the country is facing relatively strong inflationary pressure. Even so, China is still likely to hit its inflation target.

China's consumer price index, a main gauge of inflation, picked up in April with 2.8 percent growth from a year earlier. The figure is in line with market forecasts. And it's the highest since October 2008.

The National Bureau of Statistics says the CPI growth was mainly caused by the rise in food prices, which accelerated 5.9 percent.

But it says the increase was still moderate.

Shen Lanyun, Spokesman of National Bureau of Statistics, said, "The CPI growth was moderate, compared with China's fast economic growth and higher CPI expansion rates in other economies like the US and India. During the economic rebound, such moderate consumer price increase is in line with the increasing demand."

The spokesman said China will likely meet its full-year inflation target of 3 percent this year. And the consumer inflation expansion is expected to slow down in the second half of this year.

But he warns that the country still faces increasing inflationary pressure in the short term.

Sheng also said, "We see relatively big pressure for price rises in the near future, given the rising demand and global commodity prices. The increase in the producer prices also drives up enterprises' production costs."

Meanwhile, the producer price index, a major measure of factory gate inflation, grew 6.8 percent in April. That's 0.9 percentage points higher than in March, and more than expected.

China's central bank has warned that the nation faces risks to price stability. The pick-up in consumer and producer prices is adding pressure on the government to adopt more broad-based tightening measures, such as interest rate hikes. Economists say increasing inflationary threat also poses a policy dilemma for the government to balance economic growth and potential overheating.

Editor:Zheng Limin |Source: CCTV.com

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