China’s Consumer Price Index climbs to 11-year high

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Dec. 12 – Belt-tightening may now be in order as China’s Consumer Prices Index reached an 11-year high of 6.9 percent for the month compared to last year’s figures. The National Statistics Bureau’s chief economist, Yao Jingyuan, told Shanghai Daily that the consumer price increase by the year’s end could finish at 4.7 percent which indicates another price climb by next month.

Huang Yiping, an economist with the Citigroup added: “The higher-than-agreed CPI in November confirms policy makers’ increasing concerns about overheating and supports our expectation of more broad tightening measures in the coming year.

“While triggered by the food prices, the inflation has evolved into more of a macro economic problem. We expect the government to let the currency rise more quickly, alongside measures directly managing liquidities.”

The CPI gains were mainly attributed to a food price hike that resulted in 18.2 percent increase from the previous year. The CPI also bases its figures from the current price of meat and poultry, grain, vegetables, pork, eggs, tobacco, fuel and alcohol.

The price of pork increased 56 percent in November, while meat and poultry rose 38.8 percent through the month. The non-food sector also finished with a 1.4 percent increase compared to October’s 1.1 percent growth.