CHINA: Inflation looms larger as economic recovery softens
14.06.2010, 10:52China's consumer inflation sped up from 2.8% in April to 3.1% in May, topping Beijing's guard line of 3%, according to the National Bureau of Statistics.
The inflation accelerated at a time when the pace of economic recovery is stabilising, as industrial output growth eased from 17.8% in April to 16.5% in May, which brought about a dilemma to policymakers in Beijing as to whether to hike interest rates in the coming months.
Investment remained as the pillar of the growth, as fixed asset investment rose 26% year-on-year in January-May.
Meanwhile, consumption is still robust as retail sales rose 18.7% year-on-year in nominal terms in May, which was slightly faster than 18.5% in April.
Foreign direct investment continued to speed up, rising 28% to USD 8bn in May. Thus, FDI inflow into China has advanced for 10 straight months.