Chinese data raise concerns of slowdown
10 May 2011
, Hong Kong (MarketWatch)http://www.marketwatch.com/story/chinas-inflation-eases-but-still-above-forecasts-2011-05-10?pagenumber=1Excerpt:Chinese economic data released Wednesday showed consumer inflation moderated slightly in April, though remaining at elevated levels, while industrial output was weaker than forecast, amounting to a mixed picture and spurring concerns of a deepening slowdown
. China’s consumer-price index climbed 5.3% in April
from a year earlier, while wholesale inflation climbed 6.8%
The results compared to analysts’ expectations for rises of 5.2%
for the CPI and 7.3%
for producer prices, according to a poll by Dow Jones Newswires.
Food prices cooled fractionally from levels in March, but still accounted for 3.5
percentage points of the CPI rise. The rate, little changed from the 5.4% rise in March, would be viewed as a disappointment after government efforts to cool prices
, said Deutsche Bank economist Jun Ma in a note Wednesday.
Still, Ma said he saw no reason for gloom.
‘”These data remain consistent with our soft landing scenario
,” Ma said, adding that he expects China’s gross domestic product to grow 8.5%
on an annualized basis in the second half.
“Slowing activity that is not accompanied by easing inflation raises the prospect that Chinese monetary policy will continue to tighten
,” said TD Securities senior strategist Roland Randall in Singapore. Officials could soon switch from worries over inflation back to concerns of stalling growth
, a shift in focus that could be “gaining traction in policy-setting circles,” Randall said.
“Our general view is that inflation is elevated, but the risk of being out of control is small, while the risk of a hard landing or big growth slowdown is quite low
,” said Merrill’s Hong Kong-based analysts Ting Lu and T.J. Bond in a note.