China's CPI Rises 3.1 Pct in May(81082)

UPDATED: June 11, 2010 China's CPI Rises 3.1 Pct in May NBS spokesman Sheng Laiyun said the higher inflation was because of a low comparison basis from the same period last year

China's consumer price index (CPI), a main gauge of inflation, rose 3.1 percent year on year in May, the National Bureau of Statistics (NBS) announced Friday.

The May figure was up 0.3 percentage points from April's rise of 2.8 percent. It also surpassed the central government's targeted 3 percent annual inflation limit.

In the first five months, China's CPI rose 2.5 percent year on year.

The producer price index (PPI), a major measure of inflation at the wholesale level, rose 7.1 percent year on year in May, up 0.3 percentage points from April's 6.8 percent.

In May, consumer prices in China's urban areas increased 2.9 percent and in rural regions by 3.3 percent. Food prices, which accounted for about a third of the weighting in calculating the CPI, rose 6.1 percent.

NBS spokesman Sheng Laiyun said the higher inflation was because of a low comparison basis from the same period last year and was pushed up by food prices hikes.

He said China had the basics for keeping prices under control this year.

"Although China faces quite a lot of pressure, the 3-percent target is still possible with effort," he said.

Lu Ting, China economist of the Bank of America-Merrill Lynch, said in an e-mailed note that China's rising inflation could be interpreted negatively by markets, and would be a risk for a few more months.

"We don't expect a knee-jerk reaction from policymakers: interest rates won't be hiked until the fourth quarter this year," he said.

China's PPI up 7.1 pct on year in May

China's May industrial value-added output expands

China's May retail sales up 18.7 pct

China's fixed asset investment up 25.9 pct in first five months

China's home prices rise 12.4% in May

China's May exports up 48.5%

Figures in April

China April CPI up 2.8%

China's PPI up 6.8% on year in April

China's retail sales up 18.5% in April

China home prices up 12.8% in April