ADB lowers China's CPI forecast
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The Asian Development Bank (ADB) has lowered its forecast of China's 2010 consumer price index (CPI), a major gauge of inflation, to 3.2 percent from the 3.6 percent predicted in April.
"Consumer price pressures in China remained relatively subdued, with some expected utilities price increases put on hold," said Paul Heytens, ADB's country director for China, at a press conference in Beijing.
Price increases that were anticipated this year for water, natural gas, and electricity had been postponed until next year, which would help ease inflationary pressure for the year, Heytens said.
China's consumer prices, after falling for most of 2009, have edged up this year. In August, the CPI posted a 22-month high of 3.5 percent year on year.
China has set a target of a 3-percent rise in consumer prices this year. Official statistics show that, for the first eight months, the country's inflation increased 2.8 percent year on year, accelerating from the 2.7-percent gain in the year to July.
Zhuang Jian, senior economist with the ADB's China Mission, said at the conference that China's inflation rate had been boosted this year by the low comparative base registered last year, higher food prices caused by the bad weather, and excessive liquidity in the financial market.
The upward pressure for inflation in China was still modest, said Zhuang. But he expected the inflation rate to peak in the third quarter before declining the rest of year.
China's top economic planer, the National Development and Reform Commission (NDRC), said earlier this month that, although the August inflation rate rose by a large margin, it was still very likely for China to meet its full-year CPI target.
The NDRC also listed some factors that would help narrow the CPI growth in coming months, including the upcoming harvest expected to stabilize food prices and the government's plan to inject pork reserves into the market to lower pork prices.
