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China's CPI falls 1.4% in May

(Xinhua/Agencies)
Updated: 2009-06-10 11:11

BEIJING -- Chinese consumer prices fell in May for a fourth month as food and energy costs declined from last year's high levels, National Bureau of Statistics (NBS) said Wednesday.

The consumer price index for May was 1.4 percent below the year-earlier level, driven by a 22.2 percent drop in the cost of fresh vegetables and a 15.5 percent drop for meat.

Related readings:  NBS to add 10,000 CPI survey locations  CPI declines, but deflation fears ease  China's CPI falls, lending spree eases  China's CPI falls 1.5% in April  Inflation, cost of living falls: NBS

The index recorded a month-on-month decrease of 0.3 percent, according to NBS.

Food prices, which comprise one-third of the CPI, dropped 0.6 percent, as pork prices continued to drop by 32 percent on oversupply and concerns that the A(H1N1) influenza virus was connected to pigs.

Non-food prices fell 1.7 percent.

The core CPI, which excludes food and energy prices, dropped 1.3 percent year on year, said NBS.

Also in May, producer prices plunged by 7.2 percent from a year earlier, driven by a 50.6 percent drop in the cost of oil and double-digit declines in the cost of iron ore and other raw materials, the statistics bureau reported.

A prolonged period of falling prices could cause economic problems, but the recent declines were expected and are due in part to the fact that this year's prices are being compared with a period of high inflation in 2008.

The Chinese government set a full-year inflation target of 4 percent for 2009.