Inflation seen to weaken in Oct.
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Shanghai Daily, November 1, 2011
China's inflation may weaken significantly in October due to falling food costs and a higher comparative base, analysts said Monday.
The Consumer Price Index, the main gauge of inflation, may grow between 5.3 percent and 5.5 percent from a year earlier in October to notch a possible five-month low, some analysts predicted.
The rate will be slower from 6.1 percent in September, 6.2 percent in August and the 37-month high of 6.5 percent in July.
"October is going to become the third consecutive month for China's inflation to moderate," said Tang Jianwei, an economist at the Bank of Communications, who expected a rate of 5.4 percent.
He said the tight monetary policies have caused food costs to decline and he expects the inflation to ease after July'as rate.
According to figures from the Ministry of Commerce, the prices of key agricultural products fell mildly month on month in each week of October.
But the food sector, which accounts for one-third in the CPI basket and was responsible for this round of higher inflation, still expanded by 13.4 percent in September and August on the whole.
Li Maoyu, an analyst at Changjiang Securities Co, said China's inflation may weaken to 4 percent in December.
"Falling prices of global commodities amid a gloomy economic outlook, together with a higher comparative price base in China, will help contain CPI rise under 5.5 percent for the whole year," Li said. "It will also help to adjust policies to support growth."
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