August 14, 2007

Meat prices driving sharp rise in inflation in China

China's inflation rate accelerated to the highest monthly rate in a decade - driven by a 15.4 percent rise in food prices over last year, according to data released Monday (Aug 13).

July's inflation rate of 5.6 percent - was the highest monthly rate since February 1997.

Prices of pork and other meat rose 45.2 percent from a year ago and eggs 30.6 percent, the National Bureau of Statistics reported.

July's sharpest increases were limited to food while prices of clothing and other non-food goods rose just 0.9 percent in July from a year ago, according to the statistics bureau.

The bureau's chief economist, Yao Jingyuan, said inflation might continue to rise over the next two months due to food-price hikes, Xinhua reported. However, it is expected to cool off in the final quarter of the year.

Consumer prices in the first seven months of the year rose 3.5 percent compared with the same period of 2006, the statistics bureau said on its Web site.

Chinese leaders are urgently implementing measures to curb the rise in food prices.

As pork prices remained stubbornly high despite government measures to encourage pork production, authorities have ordered investigations into whether farmers or food companies are colluding to push up prices.