10th Sep 2015 06:37
BEIJING (Alliance News) - China's inflation accelerated in August on soaring food prices, while producer prices fell at the fastest pace since late 2009 largely due to easing commodity prices.
Inflation rose to a 12-month high of 2% in August from 1.6% in July, the National Bureau of Statistics reported Thursday. It was expected to rise to 1.8%.
A similar rate was last seen in August 2014. Nonetheless, inflation was well below the government's full year target of around 3%.
Month-on-month, consumer prices gained 0.5% after rising 0.3% in July.
Due to a surge in pork prices, food price inflation rose to 3.7% from 2.7%, while non-food price inflation remained at 1.1%.
A sharp fall in pig numbers in recent months will continue to put upward pressure on pork price inflation, Julian Evans-Pritchard, a China economist at Capital Economics, said. He expects inflation to pick-up over the coming quarters.
Producer prices declined at a faster pace of 5.9% annually, following a 5.4% drop in July. This was the weakest rate since late 2009 and marked 42 consecutive months of declines.
On a monthly basis, producer prices slid 0.8% after falling 0.7% in July.
The People's Bank of China cut its interest rates five times since last November and reduced reserve ratio to support lending.
China is on track to achieve economic growth targets this year, Premier Li Keqiang said at the World Economic Forum on Thursday. Li said China will continue reforms in financial sector and allow private capital to enter the sector.
Further, the premier said his country is unwilling to see a currency war.
Copyright RTT News/dpa-AFX