China's CPI growth to slow in next 2 months

0 CommentsPrint E-mail Xinhua, November 12, 2010
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China's consumer price index (CPI), a major gauge of inflation, has reached its 2010 peak in October and its growth is likely to slow over the rest of the year, a report from the Bank of Communications forecast on Thursday.

Impacts of bad weather conditions, positive output gaps, and tight industrial product supplies will gradually decline in the next two months, which may lead to a slower CPI increase despite short-term pressures from imported inflation and food price hikes that still exist, the report said.

The report was released after the country's October CPI hit a 25-month high of 4.4 percent year on year, accelerating from September's 3.6 percent.

The report anticipated that the country's whole year CPI will stand at about 3.1 percent, and the inflation growth will start to accelerate again from the beginning of 2011, driven by long-term pressures brought by global and domestic excessive liquidities, food price hikes, rising labor costs and imported inflation.

From January to October, China's CPI rose 3 percent year on year, hitting the government's target ceiling for the year.

Further, the nation's central bank raised benchmark interest rates last month and ordered banks on Wednesday to set aside more reserves in its latest effort to rein in liquidity.

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