Houston Community News >> China Inflation Rate Hits 8.7 Percent in February
3/10/2008 BEIJING (AP) - CHINA'S inflation
rate jumped to a new decade high of 8.7 per cent in February after
severe winter storms disrupted the economy and worsened food shortages,
the government said.
The increase was driven by a 23 per cent jump in food prices, according to the National Statistics Bureau on Tuesday. It was a sharp jump from January's 7.1 per cent rate and exceeded forecasts by outside economists.
The announcement increased the likelihood of interest rate hikes or other government steps to cool a surge in inflation that began in mid-2007. Beijing has raised interest rates repeatedly and tried to increase food supplies to cool price rises.
Analysts were forecasting a February inflation rate close to 8 per cent.
Snowstorms that began Jan 10 and lasted in February hammered China's south, wrecking crops, paralysing shipping and forcing some steel mills and factories to shut down. Shortages of meat and fresh vegetables caused prices to soar in snow-hit areas.
Chinese leaders worry about the political impact in a society where families spend up to half their incomes on food. They have frozen prices of gasoline, electricity and other basic goods and ordered food processors to get approval for any price hikes.
Inflation has been limited mostly to food, but data reported earlier show that pressure for across-the-board price rises is growing amid a boom that saw China's economy expand by 11.4 per cent last year.
The cost of basic oil products jumped 37.5 per cent jump in February while that for steel products was up 29.6 per cent, the statistics bureau said on Monday. Food-related raw materials rose 11 per cent.
The increase was driven by a 23 per cent jump in food prices, according to the National Statistics Bureau on Tuesday. It was a sharp jump from January's 7.1 per cent rate and exceeded forecasts by outside economists.
The announcement increased the likelihood of interest rate hikes or other government steps to cool a surge in inflation that began in mid-2007. Beijing has raised interest rates repeatedly and tried to increase food supplies to cool price rises.
Analysts were forecasting a February inflation rate close to 8 per cent.
Snowstorms that began Jan 10 and lasted in February hammered China's south, wrecking crops, paralysing shipping and forcing some steel mills and factories to shut down. Shortages of meat and fresh vegetables caused prices to soar in snow-hit areas.
Chinese leaders worry about the political impact in a society where families spend up to half their incomes on food. They have frozen prices of gasoline, electricity and other basic goods and ordered food processors to get approval for any price hikes.
Inflation has been limited mostly to food, but data reported earlier show that pressure for across-the-board price rises is growing amid a boom that saw China's economy expand by 11.4 per cent last year.
The cost of basic oil products jumped 37.5 per cent jump in February while that for steel products was up 29.6 per cent, the statistics bureau said on Monday. Food-related raw materials rose 11 per cent.
(Contributed by AP)