3Pct Target in CPI is not a Warning Line: Official

The 3 percent target set by the government in 2008 should not be judged as a warning line.

Officials from China’s top economic planner said Thursday the 3 percent target set by the government should not be judged as a warning line, when interviewed by Caijing reporters.

China’s CPI for July hit a record high of 3.3 percent this year, the highest level in 21 months, however, it is still below economists’ expectation of 4 percent to 5 percent made early this year, an official from the National Development and Reform Commission said.

Food prices rose 6.8 percent year-on-year while non-food prices climbed 1.6 percent; consumer prices surged 3.6 percent and prices of services grew 2.3 percent, official data showed.

Judging from the structure of the data, two thirds of the surging was due to tail-raising factors. Only one percent of the increase was contributed to price hikes of wheat and bad weather that may gauge inflation. From this perspective, the July CPI was moderate and there was no need to worry about price hikes, said the official.

The 3 percent limit, which was set by the government in 2008, is a not rigid target and should not be overstated, he added, noting different economic conditions this year compared with the year 2008.