Asia Bizz: China is taking a strong hammering from its inflation and during the month of February, the inflation index went higher than what was estimated. Sole reasons behind this is the soaring food prices and economists expect the inflation figures to go even higher. During the month of February, the rate expected was around 4.6-4.8%, but later the figures showed around 4.9%.
Food prices in the country went up by 11%, which was more than expected and it contributed to 67% of the inflationary jump. During the holidays and lantern festival, food consumption was strong and inflation was at the highest. The food prices were higher by 3.7% compared to the month of January.
China’s government aims to have an inflation rate of around 4% by this year and to acquire the target it will raise the bank interest rates by almost three times and reserve requirement by almost five times. The government has been working hard towards this and it shall bring the inflation rates down at almost any cost.