Nov CPI falls back to 3%
Global Times | 2013-12-9 23:38:07
By Zhao Qian
A woman buys milk in a supermarket in Ganyu, East China's Jiangsu Province on Monday. Photo: IC
CPI and PPI
China's consumer price index (CPI), the main gauge of inflation, slowed unexpectedly to 3 percent year-on-year in November, down from 3.2 percent in October, official data showed Monday, easing market concerns about possible tightening of monetary policy by the country's central bank.
The year-on-year food price index fell to 5.7 percent in November from 6.5 percent in October, partly driven by a decline in vegetable and pork prices, while the non-food price index remain unchanged at 1.6 percent, according to data released by the National Bureau of Statistics (NBS).
Individual components of the month-on-month food price index saw mixed performance in November, with prices for beef, mutton, milk and fruit rising slightly, and prices for pork, eggs, vegetables and aquatic products declining, according to an analysis report by Yu Qiumei, a senior statistician at the NBS, published on the bureau's official website Monday.
The 3 percent CPI reading could let the markets "breathe a sigh of relief," Lu Ting, China economist with Bank of America Merrill Lynch, said in a research note sent to the Global Times Monday.
In the past few weeks, markets "have been worried that the central bank could be forced to tame rising CPI inflation by tightening credit supply," said Lu.
The 3 percent CPI growth "indicated moderate inflation in China's economy," Liu Ligang, chief economist at ANZ Banking Group, told the Global Times Monday.
Liu said the growth momentum for China's economy "will not be very strong" next year given the negative growth in the producer price index (PPI) this year.
The PPI, a gauge of inflation at the wholesale level, declined by 1.4 percent year-on-year in November, compared to a 1.5 percent drop in October.
"The PPI decline shows that enterprises still face difficulties," Lu Zhengwei, chief economist with Industrial Bank Co, told the Global Times Monday.
Lu suggested that the central bank reduce interest rates so as to support the economy's stable development.
Lu Ting of Bank of America Merrill Lynch said he didn't expect the government to tighten monetary policy, partly because "the chance that monthly inflation will be sustained at the official cap of 3.5 percent or above is low."
He also said the government is unlikely to react to monthly inflation readings, as they are subject to many temporary factors and base effects.
Chinese Premier
Li Keqiang has reiterated several times this year that the upper limit for the country's CPI is 3.5 percent.
With regard to the outlook for the country's economy, Liu predicted that GDP growth will range from 7 percent to 7.5 percent in 2014.
Concerning inflationary pressure next year, Lu Ting said the average CPI could rise to 3.1 percent in 2014 from 2.7 percent in 2013, partly because inflation could rise amid stabilizing domestic economic growth, the slowly improving global growth outlook and higher home prices in major Chinese cities.
China on track to meet retail sales target: official
China is on track to achieve its target of boosting retail sales by an annual average of 14 percent between 2011 and 2015, even amid a modest slowdown in growth this year, Commerce Minister Gao Hucheng said in remarks published Monday.
Retail sales are likely to grow by 13 percent for 2013, slowing from the annual average rise of 15.7 percent in the previous two years, due to weaker household incomes and a crackdown on official extravagance, Gao said in comments published on the ministry's website.
Retail sales from January to October grew 13 percent, 1.1 percentage points lower than in the same period of 2012, official data showed.
"The economy will maintain steady growth," Gao said, "and the long-term mechanism for expanding consumption will improve, which will help unleash the huge potential of China's consumption."
Consumption will be boosted by strong demand for healthcare services for the elderly, leisure, tourism and sales of energy-saving appliances, smartphones and tablet PCs, Gao noted.
Gao said he expects China's retail sales, a key gauge of domestic consumption, to top 50 trillion yuan ($8.22 trillion) by 2020.
Retail sales increased from 9.4 trillion yuan in 2007 to 21 trillion yuan in 2012, with an average yearly growth of 17.6 percent. Consumption accounted for 55 percent of China's GDP in 2012, up from 39.6 percent in 2007, he noted.
Reuters - Global Times
Nov CPI falls back to 3% - BUSINESS - Globaltimes.cn
