Analysts say the consumer price index (CPI) may break 5 percent
in July, which would increase the likelihood of tightening measures
being introduced in the second half of this year.
The CPI for July, which will be released on Monday, may hover
around 5 percent, according to the latest forecast from Deutsche
Bank (Hong Kong). The bank said it may be 4.8 percent in the third
quarter before it drops to around 4 percent in the fourth.
The trend is in line with many analysts' predictions that
efforts to stabilize price rises will take effect later.
The CPI for the whole year will be around 3.8 percent, according
to the Deutsche Bank forecast.
Morgan Stanley (Asia-Pacific) said the CPI could reach as high
as 5.5 percent in July, while Goldman Sachs said the figure may hit
5.1 percent.
Whatever the figure, the forecasts point to rising prices in a
country where economic growth soared to 11.5 percent in the first
half of this year.
"The authorities are set to take measures in the coming months,"
said Zhuang Jian, a senior economist with the Asian Development
Bank in China.
Apart from increasing supply, the central government has told
local officials to stabilize prices.
(China Daily August 10, 2007)
