BEIJING: China's inflation rate rose at its slowest pace in nine months in November, kept in check by lower price rises for food and easing the pressure for further interest rate hikes, data showed yesterday.
The National Bureau of Statistics (NBS) said the November Consumer Price Index (CPI) was up 2.8% year-on-year, compared with 4.3% in October and 3% in November 2003.
The figure was the lowest rate since February and was down sharply on gains of 5.3% in both August and July.
“It is a sign that government policies are gradually having an effect but having said that, it is too early for the government to claim victory in the fight against overheating,” said Qu Hongbin, an economist at HSBC, while Chinese Premier Wen Jiabao was quoted by Hong Kong media as saying on Thursday that China will continue to cool the economy and try to stifle inflation next year while monitoring the impact of oil prices.
Wen said he expected China's economic development to remain steady in 2005, and authorities would continue to implement macro-economic control measures, Radio Television Hong Kong said.
Analysts said the sharper-than-expected slowdown means there is less pressure on policy makers to raise interest rates again following a 27 basis points hike to 5.58% in October – the first rise in nearly a decade.
Also working in the government's favour, figures on Thursday showed industrial output growth in November eased to 14.8% year-on-year, its slowest pace in 18 months.
Analysts said the slowdown reflected a significant drop in food prices. Notably, fresh vegetables fell by 14.4%.
However, Morgan Stanley chief China and Asia economist Andy Xie warned that it was too early to conclude that the economy was slowing.
“The CPI is still very strong ... the economy hasn't slowed down,” he said.
While CPI was easing, factory gate price data suggested there could be strong inflation pressures still coming through the system.
For the 11 months to November, CPI was up 4% , compared with 1% in the same period last year and 4.1% in the first 10 months of this year.
Urban consumer prices in November rose 2.4% year-on-year, while rural CPI was up 3.6% , the NBS said in a statement.
While food price rises overall slowed, yesterday's figures pointed to further difficulties for the urban and rural poor with the price of grain in November up 19.2%, while meat and poultry was up 12.6%.
Non-food prices increased 1.2% in November while consumer goods prices were up 2.8%. Vehicle prices fell 3.4% but fuel and automotive spare parts increased 13.7%.
Utility prices, including water, electricity and fuel rose 11.6%. – AFP