China’s March CPI higher than expected

Beijing (CNS) -- China's consumer price index (CPI) rose 3.6 percent year-on-year in March, according to the National Bureau of Statistics on Monday.

The rise was largely driven by a 7.5 percent increase in food prices, which account for nearly one-third of the basket of goods. Vegetable prices alone grew 20.5 percent from a year ago.

China's CPI climbed 3.8 percent in the first quarter, approaching the official target of around 4 percent for the full year.

Lian Ping, chief economist at the Bank of Communications, said the massive vegetable price hikes were triggered by bad weather, but the short-term fluctuation will not affect the overall downward trend of the CPI for the whole year.

Lu Zhengwei, chief economist with the Industrial Bank, agreed that the CPI will go downwards in the future, but maybe at a slower speed than people expect.

The public has speculated that rising fuel prices may have also been a contributor to the CPI rebound.

At this, Zhao Xijun, deputy dean of the School of Finance at Renmin University, said rising fuel prices had a limited influence on the March CPI, but will produce more prominent effects in the coming months as enterprises pass on the cost to consumers.