China's Aug inflation slows down

Growth of China's consumer prices is estimated to have slowed down for the first time in four months in August as food prices started to stabilize, analysts said Friday. Major investment firm China International Capital Corp. (CICC) said the consumer price index (CPI) had probably grown 6 percent last month. It said prices of meat and grain remained steady, while vegetable prices dropped. China's consumer prices surged 6.5 percent on-year to a 36-month high in July, driven mostly by food prices, which jumped 14.8 percent from a year earlier. The figure was far above the Chinese government's yearly target of 4 percent for 2011. Many analysts also expected that China will likely contain its annual inflation within the 5-percent range. In the first seven months of this year, the CPI increased to 5.5 percent from a year earlier, despite the country's tightening moves. Gao Shanwen, economist at Essence Securities, said the CPI growth will slowly cool down starting in the third quarter, as pork prices are starting to stabilize. Pork is the most widely consumed and affordable meat in China. He explained an inflation cycle and a pork prices cycle have been showing a similar pattern since 2006. Liu Shijin, deputy director of the Development Research Center of China's cabinet State Council, estimated the CPI will grow a little above 5 percent overall for 2011, as inflation growth peaked in July.