Tuesday, 11 December 2007

Inflation hits 11 year high

Articles on the new inflation figure:

China's inflation rate hits 11-year high [Reuters]

BEIJING (Reuters) - China's annual consumer price inflation hit an 11-year high in November, with new signs that price pressures are spreading from food to the broader economy, raising the prospect of more aggressive monetary tightening.

China Inflation Reaches 11-Year High, Trade Gap Grows [Bloomberg]

Dec. 11 (Bloomberg) -- China's inflation accelerated at the quickest pace in 11 years and the trade surplus swelled, underscoring government concern that the world's fastest-growing major economy is at risk of overheating.

Even the new inflation rate of 6.9% masks considerable differences across products - food for example climbed 18.2 percent. Non-food prices rose 1.4 percent. Utility prices rose 5.6 percent.

The miz across this products spells trouble for the poor. Social unrest can not be far away.


1 comment:

Regional Economist said...

China has a real monetary problem on her hands: raising interets rates to combat inflation is futile when it has to maintain an undervalued exchange rate. By selling Renminbi and buying USD, the central bank is raising the money supply and creating more liquidity in the system, thus fuelling asset and headline inflation.