China's inflation rate to accelerate in June
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Xinhua, June 22, 2011
China's top economic planner said Wednesday that the country's inflation rate will accelerate in June despite the government's efforts to stem price increases.
It is estimated June's overall price levels will be higher than those of May, the National Development and Reform Commission said in a statement on its website. However, it did not give a more specific forecast.
Carryover effects from last year will contribute 3.7 percentage points to June's inflation rate, the statement said.
Analysts have said that the consumer price index (CPI), a main gauge of inflation, will increase by 6 percent in June.
According to the commission, last year's carryover effects added 3.2 percentage points to May's inflation rate. China's CPI rose 5.5 percent year-on-year in May, a 34-month high.
As the carryover effects ease in the second half of this year and the government's anti-inflation policies start to take effect, CPI growth will decline and overall price levels will be brought under control, the statement said.
The extreme drought and deadly floods that have plagued the middle and lower reaches of the Yangtze River will have limited impact on the country's agricultural production, the statement said.
"There is little chance that the disasters will trigger a price surge for grain," it said.
The Chinese government has set a target of 4 percent for this year's CPI growth.
To soak up the excessive liquidity that has helped to fuel inflation, China's central bank has raised its interest rates twice this year and hiked its reserve requirement ratio for banks six times.
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