Transport problems set to spur further price rises
Updated: 2008-01-29 08:44
Widespread snowstorms buffeting the country may further drive up consumer prices if disrupted travel on roads and rail is not restored soon, economists have said.
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"These developments will likely push up near-term CPI inflation," Liang Hong, an economist with Goldman Sachs in Hong Kong, said.
The consumer price index (CPI) rose 4.8 percent last year, the highest rise in more than a decade. Food, which accounts for a third of the CPI basket, was a main driver of the inflation. Recently, the government has introduced several measures, including a temporary price freeze on some products, to prevent the price hikes evolving into overall inflation.
"Prices will rise further if transportation is not restored quickly," Chen Jijun, an analyst with CITIC Securities, said.
The Ministry of Commerce said this week that local authorities can deploy food reserves to deal with intense market fluctuations.
Local suppliers have also been urged to increase production of cooking oil, meat, eggs and vegetables.
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