Video>> China Q3 inflation forecast to hit 6.2%
Special Report>> Chinese gov't strives to curb rising inflation
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| A citizen chooses cooking oil in a supermarket in Qionghai, south China's Hainan Province, Aug. 3, 2011. The price of pure peanut oil rose 18.8 percent in August compared to the same period in last year. The peanut oil price on Aug. 8, 2011 is 2.8 percent higher than that of June 20, 2011. (Xinhua, File Photo) |
by Chen Jipeng
SINGAPORE, Aug. 20 (Xinhua) -- The consumer price Index (CPI) in China has most probably peaked in July at 6.5 percent, an economist from the Development Research Center of the State Council said here on Saturday.
Another economist from Singapore also said that the CPI in China have in fact started to stabilize, adding that the inflation could be pushed down faster than expected by falling pork price in six to 12 months, just as it has been pushed up fast earlier.
Nevertheless, the inflation pressure is expected to stay for some time to come, and economists said China should stick to its policy of monetary tightening.
FOOD DEMAND AND SUPPLY
Speaking at a Forum on China's Macroeconomic Conditions and Macro Policies in Singapore, Zhang Liqun, an economist from the Development Research Center, said he expected the inflation pressure resulting from surging food prices to start easing as supply increases.
Grain and rice output in China has been growing steadily in recent eight years and the production capacity of vegetables has also increased as the government has put in place incentive programs.
"Generally speaking the food supply situation has been improving, whereas the demand is basically stable," he said.
"(The 6.5 percent of CPI) in July should be a peak," he said.
China has been trying to tame the inflation recently. Nevertheless, the CPI hit 6.4 percent in June and 6.5 percent in July, respectively, due to excessive liquidity and surging food prices.
