April 9th, 2012
09:52 AM GMT
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Hong Kong (CNN) -– If you’re a glass “half full” or a glass “half empty” kind of person, you’ll see what you want to see in China’s latest inflation number. The hard number: March CPI came in at 3.6%.

On the positive side, March is the second month in a row that inflation was below 4%. Last month, China’s Premier Wen Jiabao announced a 4% inflation target for the country.

But on the negative side, March’s 3.6% inflation number is higher than what analysts had forecast. Many had thought it would come in lower – around the range of 3.2% to 3.4%.

The main reason for March’s higher-than-forecast CPI is the rising cost of food.

Chinese inflation accelerates in March

Food prices rose 7.5% year-on-year in March. Fresh vegetables jumped 20% in the same time frame. But one source of relief has been in the easing price of pork. The price of China’s staple meat fell nearly 2% in March. Compare that to a rise of more than 20% for all of 2011.

Looking ahead, China’s leaders may be wondering whether to relax the country’s monetary policy or to leave it where it is.

While we wait for new pronouncements on policy action, various investment banks are already tossing their two cents into the ring.

Goldman Sachs released a research note saying it still does expect more easing – but March’s higher-than-expected CPI could limit the magnitude of any intervention.

HSBC also released a note saying it expects a 1% point cut to the reserve requirement that Chinese banks are required to hold – from 20.5% to 19.5% – sometime before July.

The belief is that inflation will continue to ease and that March’s higher CPI was more a blip than a barometer of things to come.

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Filed under: AsiaChina

soundoff (7 Responses)
  1. will2ventures

    Reblogged this on will2ventures.

    April 9, 2012 at 11:25 am |
  2. rvastag

    Wow! Thanks for the very insightful and informative article.

    April 9, 2012 at 1:39 pm |
  3. lanhuazhi

    in china CPI are mot so important.

    April 9, 2012 at 3:05 pm |
  4. Kyle H. Davis

    lanhuazhi: How so? It's pretty important for me – I'm not one of the super-rich in China. For 99.99999% of the population, seeing their money buy less is rather important.

    April 9, 2012 at 4:29 pm |

    overcoming inflation should be their next target.

    April 9, 2012 at 9:34 pm |
  6. sameh

    learn english for free by video

    April 16, 2012 at 12:53 am |
  7. אולמות אירועים באשדוד

    על סמך החוויות שלנו ושל חברים וספקים רבים מ תחום האירועים, צוות אינדקס חתונות וודינג בוק זיהה חוסר יעילות יוצאת דופן בענף החתונות באינטרנט כיום. מצד אחד, תמיד היו ה כלה והחתן הטריים, אשר חיפשו בכל דרך האפשרית לארגן את היום החשוב ולפעמים היקר בחייהם בצורה הטובה ביותר, למצוא את הספקים הטובים והמומלצים ביותר, שיענו לכל דרישותיהם . מצד שני, נמצאים הספקים, שמטרתם היא להגיע לכמה שיותר לקוחות פוטנציאליים, להציג את השירותים שלהם בצורה היעילה והרחבה ביותר, וכמובן להגדיל את העסק שלהם.

    June 2, 2012 at 11:26 pm |

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