CPI Figures Hits 6-percent in September

The China National Bureau of Statistics has released the CPI figures for September this morning.

The country's inflation continued to ease from a 37-month high for a second month in September, despite the stubbornly high food prices.

CRI's Shen Chengcheng has a detailed 1 analysis.

 

China's consumer price index, a main gauge 2 of inflation, has risen 6.1-percent year on year in September. That's 0.1-percent down from the 6.2-percent in

September is the second month of easing from July's peak of 6.5-percent, which was a 37-month high. That was considerably 3 higher than the Chinese government's target of 4-percent for this year.

However, the slowdown didn't bring down the high food prices, which rose 13.4-percent. And the price of pork climbed the most, more than 43-percent.

Wang Jun is a fellow researcher at China Center for International Economic Exchanges.

He says the hike in food prices is partly because of the two holidays, the Mid-Autumn Festival and last week's National Day Holiday.

But, he adds that high food prices are not going to change the easing trend of the CPI numbers.

"The speed of economic growth is slowing down, so the inflation should follow suit. The government measures adopted earlier to ease inflation are starting to work. In September, a new factor contributing to the CPI numbers is high vegetable prices. Apart from that, the prices of other products are decreasing. So September's CPI continued to ease."

In the meantime, some economists 4 say the pressure of inflation is still high.

"The inflation rate is still at a high gear. We should not forget that September's CPI is 0.5-percent higher than the number of August. That's against expectations that the 3rd quarter index would go down."

That's Cao Honghui from the Financial Research Department of the Chinese Academy of Social Sciences.

He says the Producer Price Index, a major gauge of inflation at the wholesale 5 level, rose 6.5-percent year on year in September, and it has been driving food prices high.

"The high prices of the raw materials and labors 6 are taking a toll 7 on the food prices. And in the short term, they are not going down."

So that means the Chinese government will continue its policies to curb 8 inflation.

A case in point - the government has reduced the prices for gasoline and diesel 9 by 0.22 yuan per gallon and 0.26 yuan per gallon respectively.

However, researcher Wang Jun says we are going to see a few adjustments to the tightening 10 policies due to the slowdown of the overall global economy.

"We probably shouldn't keep tightening the current monetary 11 policy, and should loosen it up on certain fronts. That can help those small and medium-sized businesses and the cash-strapped banks to tide over, which is totally necessary."

For CRI, I'm Shen Chengcheng.