CHINA`S INFLATION RATE RISES BUT ECONOMIC OUTPUT SLOWS

11.06.2010 [13:50]
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The inflation rate in China has surpassed the government`s target, raising the prospect that Beijing may increase interest rates.

The annual rate of inflation rose to 3.1% in May, the National Bureau of Statistics said. This was up from April`s figure of 2.8% and overtook the government`s own inflation target of 3%. But factory output and investment eased in May, complicating Beijing`s efforts to maintain steady economic growth. A spokesman for the statistics bureau admitted that the pressure on inflation was "rather big", but said prices would be controlled.

Higher food and housing prices were mainly to blame for the acceleration in inflation. Meanwhile, producer prices at the factory gate rose by a faster-than-expected 7.1% in May and 5.9% over the January-to-May period. However, while industrial output from the country`s millions of factories and workshops rose 16.5% in May, this was down from the 17.8% increase seen in April.

CHINA`S INFLATION RATE RISES BUT ECONOMIC OUTPUT SLOWS

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