China's Consumer Price Index (CPI), a key index for inflation, is expected to surpass four percent in June as a result of rapidly rising food prices, the China Securities Journal reported on Monday.

 

Official figure will be released by the National Bureau of Statistics on Thursday. The CPI climbed 2.9 percent in the first five months of this year over that of same period last year, but surged by 3.4 percent in May over May last year, the highest CPI figure in two years.

 

The newspaper run by Xinhua News Agency also pointed out a disparity among local analysts as some projected the CPI in June at 3.4 percent, some at 3.85 percent, and others agreed to 4.3 percent.

 

The analysts polled by the newspaper agreed that food price hikes, which account for 34 percent of the CPI basket, would remain the predominant driver of inflation in June.

 

The wholesale prices for 19 kinds of vegetables and several types of meat and fish monitored by the Ministry of Agriculture rose by 5.5 percent in June over May.

 

Analysts have labeled meat and eggs as the biggest engine for inflation as pork prices rose by 12.9 percent from May to June this year, while beef went up by four percent and eggs by 1.08 percent.

 

Statistics from the National Development and Reform Commission show massive price hikes in grains, edible oils, housing, public utilities and services last month. Only production material prices dropped in June.

 

Analysts say the GDP spurred by robust exports was expected to grow by 11.1 percent in the first half of the year, while fixed assets investment was expected to grow by 26 percent over the same period last year.

 

(Xinhua News Agency July 17, 2007)