June 14, 2011

China’s inflation accelerated to the fastest pace in almost three years in May and industrial production rose more than estimates, sustaining pressure for a further interest-rate increase.

Food prices rose 11.7 percent from a year earlier as pork and vegetable costs surged, while China’s producer prices were up 6.8 percent, contributing to non-food imflation of 2.9 percent.

Inflation has exceeded the Chinese government’s 4 percent target every month this year but, the pace remains the slowest of the so-called BRIC nations, with the latest data showing annual rates of 6.6 percent for Brazil, 9.6 percent for Russia and 8.7 percent for India.

China has raised interest rates four times since September as well increasing banks' reserve requirements and allowing the yuan to appreciate slightly against the dollar.

Source
Bloomberg