by Phani Kumar
China’s consumer prices accelerated to a-three-year high in June as food prices soared 14.4%, according to data released Saturday, reaffirming expectations that Beijing won’t be in a hurry to relax its monetary stance even if it may not aggressively pursue more interest-rate increases.
Monthly data released by the National Bureau of Statistics of China showed the consumer price index for June climbed 6.4 % from the same period the year before. Many economists had expected the rise to be between 6.2% and 6.4%.
That increase compared with a 5.5% jump in May, which was itself the fastest rise in CPI since a 6.3% increase in July 2008.
The high reading was broadly in line with expectations, with economists at Daiwa and UBS having tipped a 6.4% jump in June CPI, while those at Morgan Stanley had projected a 6.2% increase.
The Daiwa economists wrote ahead of the data release that they expected June data to “disappoint the market, again.”
They said that while inflation in mainland China was mounting, they “continue to see a risk of a sharp production slowdown over the near term, on the back of worsening credit conditions and a slowdown in aggregate demand.”
The analysts said that, after the People’s Bank of China raised its deposit and lending rates by 0.25 percentage points Wednesday, they didn’t expect further policy tightening.
“However, we do not see policy relaxation until [the October-December quarter], as policy makers’ hands are tied by still-elevated CPI and property-price inflation,” they added.
No comments:
Post a Comment