September CPI up 3.6%, a 24-month record high
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Higher food prices pushed the consumer price index (CPI), China's main gauge of inflation, to a 23-month high of 3.6 percent in September, but officials said China could still achieve the 3-percent full-year inflation target.
On a month-on-month basis, China's CPI grew 0.6 percent in September from August, Sheng Laiyun, spokesman of the National Bureau of Statistics, said Thursday at a press conference.
Surging food prices because of "adverse natural conditions" was the major reason for accelerated CPI growth in September, Sheng said.
Food prices, which account for about one third of the weighting in calculating the CPI, climbed 8 percent year on year last month. The year-on-year growth rate of China's food prices picked up from 7.5 percent in August, 6.8 percent in July and 5.7 percent in June.
China's CPI rose 2.9 percent year on year in the first nine months of this year, approaching the government's target ceiling of around 3 percent for the year.
Although the current situation was challenging, it was still possible for China to achieve the annual target this year with proper regulation, Sheng said.
The People's Bank of China, the central bank, surprised the market Tuesday by its first interest rate rise in nearly three years. The country's one-year lending and deposit rate was raised by 25 basis points, effective from Wednesday.
The interest rate rise was a response to emerging problems in the national economy, Sheng said. "It will have a positive influence on enhancing liquidity management, curbing price increases, improving macroeconomic regulation and promoting economic structure adjustment."
However, he did not elaborate on the emerging problems.
The September CPI was in line with market forecasts, said Lu Ting, China economist with the Bank of America - Merrill Lynch. "If we take into account the different holiday schedule, September CPI inflation should be adjusted downward a bit," he said in an emailed note to clients.
China's three-day Mid-Autumn holiday fell in September this year, but was in August last year.
However, Zhu Jianfang, chief analyst at the Citic Securities, expected China's CPI growth to hit a new record high in October, rising from between 3.8 to 4 percent from one year earlier.
The benchmark Shanghai Composite Index fell 1.3 percent in the morning trade session Thursday to 2,964.97 after the NBS data release.
According to the NBS, China's gross domestic product grew 9.6 percent year on year in the third quarter this year, down from the 10.3-percent rise in the second quarter and the 11.9-percent rise in the first quarter.
The producer price index (PPI), a major measure of inflation at the wholesale level, rose 4.3 percent in September from a year earlier, unchanged from that in August, he said.
China's PPI grew 0.6 percent in September from the previous months. In the first nine months this year, the index climbed 5.5 percent compared with one year earlier.
Lu expected PPI growth to pick up in the coming months because of recent rises in metal and resource prices.
