China battles 4-month high inflation
June 10, 2014, 7:36 am

Prices of pork, a staple of the Chinese diet, dipped 0.6 per cent, those for the meat and poultry category in general increased 3.2 per cent [Xinhua]

The Consumer Price Index (CPI), a main gauge of inflation, increased 2.5 per cent year on year in May, up from 1.8 per cent in the previous month, according to the National Bureau of Statistics (NBS).

Accelerated increases in food prices were the main contributor to the higher CPI figure. Food prices increased 4.1 per cent year on year, nearly double the 2.3 per cent in April, lifting the CPI figure by 1.35 percentage points.

The price of fresh fruits surged 20 per cent, boosting the CPI by 0.43 percentage points.

While prices of pork, a staple of the Chinese diet, dipped 0.6 per cent, those for the meat and poultry category in general increased 3.2 per cent, pushing up the CPI by 0.23 percentage points.

Prices of grain went up 3 per cent, lifting the CPI by 0.09 percentage points, while fresh vegetable prices went down 2.5 per cent, pulling down the CPI figure by 0.08 percentage points, the NBS said.

The NBS attributed the higher CPI mainly to the “carry-over effect” resulting from a low comparison basis last year, which contributed 1.6 percentage points to the figure.

However, real price increases still contributed 0.9 percentage points to the higher CPI figure, widely seen as a boon to the world’s second largest economy, which grew at its weakest pace in 18 months during the first quarter.

The higher CPI came as China’s economy shows tentative signs of stabilizing. Official data showed earlier this month that growth in China’s manufacturing sector continued to accelerate in May, hitting a five-month high.

Source: Agencies