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Chinanews, Beijing, Aug 8 – At this time of August, many economists2 have begun to pay attention to the upcoming publication of the CPI figures of last July. A recent survey conducted by reporters at the China Business News shows that many institutions predict that CPI growth might reach 5.1% in July, so Chinese government might further raise the interest rate once again during the second half of the year.
Faced with the growing CPI figures, the chance has risen for the government to take measures to counter inflation and cool down the economy, said Li Huiyong, an economic analyst3 at Shenyin Wanguo Securities Co., Ltd. In a report presented by Li, it is said that as the prices of some goods, including pork, continue to rise in China, more and more goods are affected4 by such price hike. In July, CPI growth rate further increased. That CPI growth might touch 5.1% in July means that it is 0.7 percentage point higher than the previous month. The floods occurring in some regions in China might further worsen the situation. In light of this, CPI growth might even reach 5.3% in July, a high point that once occurred in the same month in 2004, the report says. Lin Zhaohui, a senior economist1 at Guo Tai Jun An Securities Company, said CPI growth in July would surely exceed 5%. To back up his point, he said the new round of price hike was caused mainly by the price rise in foods. Guo Hai Securities Co., Ltd. first predicted that CPI growth for July would reach 4.9%. Later, it raised the predicted growth to 5%. One of the company’s analysts5 on macro economy cited the daily changes of the wholesale6 price of agricultural products, saying that in July, the index of wholesale prices of meat and vegetables and the general price index of agricultural products kept rising. Apart from these two indexes, the prices of other goods had not risen much. In light of this, he predicted that CPI figures in July should not rise substantially compared with that of June.
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