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Capital goods prices to remain high in Q4

(Xinhua)
Updated: 2007-10-24 11:07

China's capital goods prices will maintain a high level in the fourth quarter this year, driving the annual rise in prices of capital goods in distribution to four percent, according to the National Development and Reform Commission (NDRC).

The monthly rise in capital goods prices dipped to 0.7 percent in June but it rebounded over the next three months to settle at four percent in September.

Prices of capital goods in distribution rose 3.6 percent in the first nine months, 1.1 percentage points higher compared with the same period of last year.

Price hikes of steel and cement from January to September were below the rising capital goods prices, said the NDRC report.

Strong demand on the international market was driving up the steel prices and the domestic demand for steel and cement was solidly backed up by increasing fixed assets investment, according to the report.

It said the rising trend of capital goods prices was likely to continue into the fourth quarter.

Analysts said rising producer prices had driven up consumer prices.

China's consumer price index (CPI), a major barometer for inflation, eased slightly in September, but the country remains under great pressure to tame the figure.

The CPI would rise 4.3 percent for the whole of this year, exceeding the government-set alarm level of three percent, Wang Xiaoguang of the NDRC predicted on Tuesday.


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