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CPI Climbs 2.7% on Food Prices
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Rising food prices continue to push up China's consumer inflation gauge, but according to economists, the increases will be short-lived.

 

China's consumer price index (CPI) grew by 2.7 percent in February over the same month last year, 0.5 of a percentage point higher than the previous month, the National Bureau of Statistics said yesterday.

 

"A rise in food prices has been pushing up CPI figures since November and will likely keep the headline numbers at 2 to 3 percent in the coming months," said Qu Hongbin, chief economist at HSBC China.

 

Official statistics show that food prices were up by 6 percent over the same month last year.

 

"Rises in food prices should be temporary given China's massive stockpile of grain after three good harvests," said Qu.

 

The growth in grain prices slowed slightly from 6.9 percent in January to 6.8 percent in February, while price rises of meat and eggs picked up from 13.5 percent and 21.4 percent to 15.4 percent and 30 percent respectively.

 

"This implied that price gains of grain products were no longer the main contributor to headline CPI," said Qu.

 

Song Guoqing, an economist at Peking University, agreed that grain prices are unlikely to rise further. But Song said the current grain price is just approaching its long-term average level, which has been declining slowly.

 

(China Daily March 14, 2007)

 

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