Chinese inflation in August at highest level since 1996

12 September 2007

Beijing, China, 12 Sept – China’s inflation rose to its highest level since 1996 in the month of August, totaling 6.5 percent, which is more than two times the government projection for 2007, the National Statistics Department said Tuesday in Beijing.

The rise in inflation, which in June was 5.6 percent, makes it increasingly difficult to reach the Chinese government’s macroeconomic target of stabilizing the rise in prices at 3 percent by the end of the year.

In the first eight months of the year, the consumer price index rose 3.9 percent in comparison with the same period of 2006, according to a statement from the National Statistics Department.

The main driver behind the price rise in August, according to the department, was the 18.2 percent rise in the price of the basket of food goods, including the controversial 49 percent rise in the price of meat.

The government is expected to implement measures to cool the growth of the economy, which expanded by 11.9 percent in the second quarter and 11.5 percent in the first half of the year.

The governmental measures that were intended to cause a gradual slowdown of the economy, including four interest rate rises, have so far had no effect. (macauhub)