China s July CPI rises to 21-month high, PPI growth falls

China s consumer price index (CPI), one of the main gauges of inflation, rose in July to its highest level since October 2008, boosted by rising food prices after widespread floods, the National Bureau of Statistics (NBS) announced.

The CPI was up 3.3% in July from a year earlier, exceeding the 3% full-year target ceiling the government set in March. The country s CPI gained 2.7% year on year in the first seven months of this year, NBS said.

Food prices, which account for about a third of the weighting in calculating the CPI, climbed 6.8% in July, compared with June's increase of 5.7%. Because of severe floods, vegetable prices surged 22.3% in July from a year earlier, grain prices were up 11.8% while poultry product prices rose 4.1%. The high growth of CPI in July was also a result of a lower comparison base last year, the CPI fell 1.8% year on year in July of last year.

Consumer prices for the full year would maintain a stable level based on a moderation in economic growth, government efforts to avoid possible inflation and growth slowdown of the producer price index (PPI), NBS said.

The PPI, a major measure of inflation at the wholesale level, grew 4.8% year on year in July, 1.6 percentage points lower than in June and 2.3 percentage points lower than May. The PPI climbed 5.8% in the first seven months, the NBS said.