China’s inflation rate eases in August

| September 9, 2011 | 0 Comments

Inflation in the world’s second largest economy eased last month after reaching a 3-year high in July.

According to the National Statistics Bureau, consumer prices rose by 6.2% in August on an annual basis, compared with 6.5% the previous month.

Several other economies throughout the world are battling with higher inflation, particularly in Asia, which are the result of soaring food costs.

A report published yesterday showed global food prices are hovering near an all-time high, according to the UN Food and Agriculture Organization (FAO).

The index hit a level of 231 points in August – a rise of more than a quarter compared with the same period a year ago.

Back in February, the index hit an all-time high of 238 points.

China’s Government has made several attempts to contain prices and it has previously said it will make reining in prices its top priority.

The People’s Bank of China has hiked interest rates several times in the last twelve months in a bid to tame inflation – measures which several other Asian countries have adopted.

Analysts now believe inflation has reached its peak and will fall back during the remainder of the year as policy measures take effect.

Inflation fears are always a concern to Chinese officials due to the potential for price rises to trigger civil unrest.

However, despite the fall in consumer prices, analysts still believe the Government needs to do more to contain rising prices.

According to one economist, the fall in inflation was attributed to a moderation in pork price rises.

However, the news lifted Asian markets with Hong Kong’s Hang Seng Index adding 0.2%, while the Australian ASX Index was 0.2% higher.

However, Japan’s Nikkei Index lost 0.3% after date revealed the economy performed worse than originally thought in the second quarter.

In the meantime, separate figures released today show Chinese industrial output rose 13.5% in August on an annual basis, albeit slower than July.

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