Chinas inflation jumps to 3-year high
Beijing: China’s stubbornly high inflation accelerated to a three-year high in June even as the overheated economy began to cool.
Consumer prices rose 6.4 percent over a year ago, a sharp jump from May’s 5.5 percent rate, data showed Saturday. It was driven by a 14.4 percent rise in politically volatile food costs, up from May’s 11.7 percent.
Communist leaders have declared taming prices their priority this year, but inflation has steadily risen this year even as economic activity gradually eased following repeated interest rate hikes and other controls.
Inflation is politically dangerous for the ruling Communist Party because it erodes economic gains that underpin its claim to sole power and can fuel unrest.
The Cabinet’s planning agency forecast earlier that June inflation would likely exceed May’s increase due to summer flooding that damaged crops and pushed up the price of pork, vegetables and fruit.
Rapid growth in factory output, bank lending and other activity have all eased in recent months, indicating that efforts to steer the world’s second-largest economy to a more manageable growth pace after last year’s double-digit expansion are gaining traction.
Forecasters expect inflation to ease in coming months, but the government has conceded it will overshoot the official 4 percent target for the year.