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Economists forecast lesser inflationary pressure in China despite quake devastation
Updat:May 26, 2008   Author:lj   Click:[]

www.chinaview.cn2008-05-25 00:21:40

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BEIJING, May 24 (Xinhua) -- Economists from major investment banks said Saturday China's high inflationary pressure would gradually ease this year though the worst earthquake in decades ravaged southwestern regions. "The quake didn't change our prediction on China's consumer price index (CPI), whose year-on-year rise we think would gradually fall below 6 percent in the second half," said JPMorgan chief China economist Frank FX Gong at a forum here. "Without the quake, May's CPI would be less than 8 percent up from the same period last year," said Gong. "Now the growth is expected to be around 8 percent but other months won't be affected." China's CPI, the main inflation indicator, rose 8.5 percent year-on-year in April, compared with 8.3 percent in March and a nearly 12-year-high of 8.7 percent in February. Food price rises, the main driving force for the high CPI level, would get milder in the second half, said UBS senior China economist Wang Tao. Farm produce prices had already slumped 2.9 percent month on month in the first few weeks of May, estimated with figures from the Ministry of Commerce and the Ministry of Agriculture, according to chief economist Ha Jiming of China International Capital Corporation Limited. He predicted the CPI rise in May was likely to be lower than in April and stood between 6 percent to 7 percent for the whole year, taking non-food prices into account. Food prices accounted for roughly a third of CPI's calculation in China. Due to large increases seen in food supply, such as in pork production, the inflation gauge would come down to around 4 percent by the fourth quarter and the overall level for 2009 would stay fairly low, Robert Subbaraman, chief economist Asia Ex-Japan of Lehman Brothers told Xinhua. The earthquake was expected to have an impact on inflation, as the jolted Sichuan Province and Chongqing Municipality in combination was a quite large area to produce food, said Subbaraman, who added the influence would not be as obvious as that of the snow storm months ago, though. The severe winter in January and February had paralyz

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