| Consumers select food at a supermarket in Shanghai, east China, Oct. 9, 2013. China's consumer price index (CPI), a main gauge of inflation, rose 3.1 percent year on year in September, up from 2.6 percent in August, the National Bureau of Statistics (NBS) said on Monday. (Xinhua/Yang Shichao)
BEIJING, Oct. 14 (Xinhua) -- China's consumer price index (CPI), a main gauge of inflation, rose 3.1 percent year on year in September, up from 2.6 percent in August, the National Bureau of Statistics (NBS) said on Monday.
The figure slightly missed market expectations of a growth rate between 2.9 percent and 3 percent.
In the first nine months, year-on-year CPI growth stood at 2.5 percent on average, well below the government's full-year target of 3.5 percent.
Yu Qiumei, a senior statistician with the bureau, attributed the rise in September mainly to a rebound in food prices due to the holiday effect, as well as droughts and floods in some regions. Food prices account for about one-third of the CPI calculation.
Last month, food prices rose 6.1 percent year on year, while prices of non-food products, including clothing, home appliances and daily necessities, moved up 1.6 percent, according to the NBS.
"Floods in the north, high temperature in the south, as well as typhoons have affected the supply of vegetables and fruits," said Niu Li, an expert with the State Information Center (SIC).
In September, prices of vegetables and fruits surged 18.9 percent and 12.5 percent year on year, respectively, the NBS data showed.
Although the carryover effect may dwindle in the remainder of the year, factors driving up the inflation will continue to take effect, Niu said, forecasting that a CPI growth of 3 to 3.5 percent will be commonplace in the following three months.
Full-year CPI growth will be about 2.8 percent and there will be no difficulty in realizing the macro-economic control target set at 3.5 percent, according to Niu.
China's economy expanded 7.5 percent in the second quarter, the same as the government's full-year growth target but slowing from 7.7 percent in the first three months and 7.9 percent in the final quarter of 2012.
However, a string of economic indicators in the past couple of months have suggested a firming economy.
Monday's data showed China's producer price index, which measures inflation at the wholesale level, fell 1.3 percent in September from a year ago. The pace of the decrease has been easing for four straight months.
An official survey also showed earlier this month that the Purchasing Managers' Index, a barometer for the health of China's manufacturing activities, set a 17-month record high in September.
Niu said a stabilizing economy has shored up the price of industrial products, while a modest rebound in consumer prices suggested improved market confidence.
"Inflation around 3 percent and an economic growth of around 7.5 percent are a comfortable combination," added the SIC analyst.
The Chinese leadership has suggested tolerance to slower growth as the country rebalances its economic structure through across-the-board reforms.
President Xi Jinping said last week while addressing the Asia-Pacific Economic Cooperation CEO summit that the recent economic growth is within a reasonable range.
"An annual speed of 7 percent is enough to realize China's goal of doubling gross domestic product (GDP) and income per capita between 2010 and 2020," the president said, vowing to hold onto structural reform to tackle problems for China's long-term development.
The confidence of the Chinese leaders in the national economy is also felt by Liu Ligang, chief Greater China economist at ANZ Banking Group.
Liu said the central bank will not change the current "slightly tightening" monetary policy over the inflationary pressure, as Premier Li Keqiang has on many occasions stressed China will maintain its monetary policy and expressed confidence in meeting the annual growth targets.
But analysts also warned of inflationary pressure in 2014. Zhang Zhiwei, chief china economist at Nomura, forecast CPI inflation will rise further in the fourth quarter and noted rising risks that it may rise above 3.5 percent for some months in 2014.
"The rise of CPI inflation leaves little room for policy easing as the benchmark deposit rate is only 3 percent," Zhang said in an email note.
Kuang Xianming, head of the economic research center with the China Institute for Reform and Development, also warned of increasing inflationary pressure in 2014 and advised policymakers to keep a close eye on medium- to lower-income groups.
The NBS is scheduled to release GDP data for the third quarter on Friday.
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