Beijing: China’s inflation rate increased to 2.0 percent in November, official figures showed yesterday, in another sign of a continued rebound in the world’s second biggest economy following a marked slowdown.
It is the first increase in the consumer price index since August and a significant leap from October, when inflation stood at a 33-month low of 1.7 percent.
But the November figure signals that inflation for the whole of 2012 will be far lower than the government’s target of 4.0 percent, and will remain stable throughout 2013 as China’s economy continues to expand, analysts say.
“The Chinese economy is in the sweet spot now with rebounding GDP growth, rebounding earning growth and low inflation,” said Lu Ting, China economist at Bank of America Merrill Lynch.
Lu also said he expected inflation to increase to around 2.2 percent in December and forecasted a rate of 3.0 percent throughout 2013.
Ren Xianfang, senior China economist with IHS Global Insight, said the November figure does not suggest China is heading to a return to high inflation, which peaked at 6.5 percent in July 2011.
“The reacceleration in consumer price inflation, now back to the two percent territory, is sparking fears about another inflationary shock next year,” Ren said.
“We believe inflation rates will pick up in 2013, but not dramatically. The price rebound going forward will be best described as a gradual end of disinflation, rather than acceleration in inflation.”
Inflation became a number one issue for Beijing over the course of 2012 after it peaked last year.
China’s Communist Party leaders reacted to drive down high consumer prices, which is seen as a threat to its key goal of maintaining social stability.
But the most recent National Bureau of Statistics figures suggest tackling inflation is now becoming less of an issue, analysts say. “Bottom line is that inflation won’t be the number one concern next year,” said Ren.
A research note from ANZ Bank said it expected China’s inflation figure will be about 2.7 percent across the whole of this year — well below the government’s target. The November figure compares with a median 2.1 percent forecast for November in a survey of 12 economists by Dow Jones Newswires.
Food prices, which account for nearly one-third of China’s CPI, rose 3.0 percent in November year-on-year, the NBS said.
AFP
