China's CPI in December may decline

Though China's December consumer price index (CPI), an indicator of inflation, has not been released yet, analysts forecast that there will be a decline in the figure.

According to its latest report, Shenyin Wanguo Securities predicted China's CPI growth may reach 6.1% in December, compared with an 11-year peak of 6.9% in November. However, the Shanghai-based Guotai Jun'an has set its estimate at 6.3%.

An analyst with Shenyin Wanguo said last year's tightening measures, highlighted by six interest rate hikes and 10 reserve requirement ratio increases, likely had started to exert an impact.

The government has been making continuous efforts to control the food prices hikes, such as subsidizing farmers to raise more pigs and encouraging more farm produce. In fact, excluding the food prices, China's consumer inflation is still normal, staying above the government-set alarm level of 3%.

"Food prices will start easing next month, as increased domestic production alleviates the supply-demand imbalance. But non-food prices, fueled by rising energy and resource costs, may pick up," said Sun Mingchun, an economist at Lehman Brothers Holdings Inc.

The National Bureau of Statistics indicated January 25 might be the earliest possible date to realize the CPI figure.