China's CPI may grow 1.5% in December

China's CPI growth rate may widen to 1.5 percent in December, after the CPI picked up its upward trend in November, said some experts.

Ha Jiming, chief economist of the China International Capital Corporation Limited, predicted that December CPI may grow 1.6 percent year on year, spurred by hiking food prices. Qi Jingmei, a senior economist with the State Information Centre, earlier noted that the CPI growth rate would be higher than 1 percent.

"Judging from price rally in November, CPI may increase more than expected," said Jiang Chao, an analyst with Shanghai-based Guotai Junan Securities Co. (GTJA). He predicted that due to holiday factors, food prices will continue to rise in January. Meanwhile, non-food prices will also add pressure to consumer prices.

According to data released by China's Ministry of Commerce and Ministry of Agriculture, agricultural products prices continued to rise in December, but the increase rate was lower than the previous month. In the first three weeks of December, agricultural products prices rose by 1 percent, 0.7 percent and 0.5 percent respectively.

Although pressure of food prices hike is mounting, in the short-term, monetary policy won't be adjusted to deal with this issue, as the policy should reserve enough space for the pressure of resource and public utilities price reform, said Ha Jiming.

There are also experts believe that the price hike will have an active and controllable impact on China's economy.

"Consumer prices will rise slowly in the future. CPI and PPI will rise to a mild level in the first half of 2010 and then remain stable," predicted An Xinwen, chief economist with Anxin Securities.

By People's Daily Online