China’s inflation rate slows in 2012



AGENCE FRANCE PRESSE

Published — Saturday 12 January 2013

Last update 12 January 2013 5:23 pm

| نسخة PDF Print News | A A

Beijing: China's inflation rate slowed sharply in 2012, official data showed yesterday, but analysts warned of increasing price risks this year that may limit scope for measures to boost economic growth.
The country's consumer price index (CPI), a main gauge of inflation, rose 2.6 percent in 2012, the National Bureau of Statistics (NBS) said, down from 5.4 percent the year before.
The annual inflation figure was also lower than the government's target of 4.0 percent, signaling that prices remained well under control last year.
Inflation stood at 2.5 percent year-on-year in December, the NBS said, the second straight month that the reading rose and the highest since May, when it hit three percent.
Rising food prices, particularly for vegetables due to unusually cold weather, were the major contributor to the December increase, according to the bureau.
The benign inflation environment came as China's economic expansion slowed during the first nine months of the year, with GDP growth of 7.4 percent in the three months to the end of September — the worst in more than three years.
But data for the final three months of the year, including manufacturing, broader industrial output and retail sales, have spurred optimism among economists that growth accelerated in the fourth quarter.
However, the fact that CPI was surging on food price spikes would limit leeway for policymakers — who are sensitive to the risk of inflation leading to social unrest — to take further easing measures to spur economic growth, analysts said.
"The central bank is concerned about underlining inflationary pressures and it is one reason they have not cut more aggressively," said Ben Simpfendorfer, managing director of Hong Kong-based economic consultancy firm Silk Road Associates.
"So the biggest risk is this is actually a restraint on policy makers' ability to support the economy, either through rate cuts or through more stimulus," he told AFP.
Policymakers cut interest rates twice last year and trimmed the amount of cash banks must place in reserve three times from December 2011 in a bid to encourage lending and pump up economic growth.

Yao Wei, an economist with Societe Generale in Hong Kong, said that the increase in China's sub-index of housing inflation to three percent last month from 2.6 percent in November, may increase policy uncertainties.
The reading — a key barometer of the country's property market — covers leasing and decoration costs, but excludes purchase prices, according to the NBS definition.
"The central government may come under pressure to tighten controls on the property market once the sector shows signs of heating up, which will definitely affect the pace of the overall economic recovery," she said.
The government has sought to curb property speculation for the past two years, with measures including restrictions on second and third home purchases, higher minimum downpayments, and annual taxes in some cities on multiple and non-locally-owned homes.
The moves cooled the once red-hot market, but demand remains pent-up and government monetary policy has eased in recent months.
China releases fourth-quarter GDP figures next Friday.

What's happening around Saudi Arabia

SYDNEY: Amnesty International has demanded that Mustafa Al-Hosawi, a Saudi prisoner at Guantanamo Bay in Cuba, be treated for the torture he underwent at the hands of the CIA.The US branch of the organization sent a message to health officials at the...
JEDDAH: The city’s airport staff saved a 20-year-old woman who tried to throw herself from the upper floor to the mezzanine floor in the southern hall. Sources said the suicide attempt was due to family disputes. Administrators said a supervisor in t...
RIYADH: Education Minister Ahmad Al-Issa has ordered to gradually close down private night schools beginning from the current year. The closure of these schools will be complete by 1439H.Al-Issa’s decision is based on reports of a body, which highlig...
RIYADH: A cross-section of Saudi society on Friday denounced the Jazan massacre that shook the nation on Thursday, when a gunman went on the rampage killing seven education officials and injuring several others in Al-Dair governorate.The culprit, ide...
JEDDAH: Maj. Gen. Awad Al-Balawi, head of the Saudi Border Guard, recently confirmed the expansion of the employment program for women within the border security sector. He said that the sector is entering a new phase as women will be employed in a n...
RIYADH: A medical team of the King Abdullah Specialist Children’s Hospital (KASCH) at the King Abdulaziz Medical City (National Guard) here have successfully conducted the first liver transplant on a baby boy. Fahad Mari Said Al-Sairdh, father of the...
JEDDAH: The Makkah Investigation and Prosecution Board reintroduced the crane crash incident to the Riyadh Investigation and Prosecution Board recently, adding 10 more employees and supervisors from different government agencies before the courts. Th...
JEDDAH: The teacher who gunned down seven education officials in Al-Dair governorate on Thursday had been showing behavioral problems in recent days, Al-Janob Misfer Al-Subhan, director of King Faisal Secondary School in Dharan, was quoted as saying...
JEDDAH: The Human Rights Commission (HRC) is investigating the Nakheel Mall case, in which a girl was beaten up by a group of Haia members, an official of the commission has said. “The HRC is supposed to guarantee the rights of those harmed, whoever...
AL-AHSA: King Faisal University (KFU) in Al-Ahsa is currently studying the possibility of admitting female students to specialize in veterinary medicine, the director of the university, Dr. Abdulaziz Al-Saati, confirmed. He said the matter has been p...
JEDDAH: A fingerprinting campaign, titled “Imprint Homeland,” against extremism and terrorism, was launched at the Jeddah corniche on Thursday night. The drive will cover all the 17 regions of Makkah province.The campaign, initiated by the Makkah gov...
RIYADH: The number of unemployed Saudi nationals reached 647,000 by the end of last year, of whom 56 percent, or 363,800, hold bachelor’s degrees or licenses. Female bachelor’s degree and license holders accounted for three-fourths of unemployed Saud...
RIYADH: Four citizens have been arrested in two murder cases, one of which was a road rage. One of the suspects resisted arrest and even opened fire on the police, but no one was injured.According to the Riyadh police, a clinic informed them that it...
MAKKAH: Thirty percent of male middle school students and 23 percent of female students take some form of drugs, a recent scientific study from the National Center for Youth Research confirmed. The study shows drug consumption rates among students in...
RIYADH: Several government departments participating in a campaign to fight breast cancer in the Eastern Province will offer their recommendations to the Ministry of the Interior to include breast cancer checks for women aged 40 and above as part of...

Stay Connected

Facebook