CHINA will continue to "actively" take measures to stem rising food costs, and a senior central bank official claimed yesterday that government efforts in this regard so far have been effective.
The People's Bank of China will closely monitor inflation and take measures to curb the rise in order to stabilize prices, said Su Ning, deputy central bank governor, during an online interview.
"Based on an analysis of data so far this year, the annual consumer price index may still grow by more than three percent even if we reinforce micro-economic controls for the rest of the year," Su said.
Inflation may ease once the government is able to control food prices, he added.
The country's inflation in July jumped 5.6 percent from July last year, the strongest increase in more than a decade, driven by rising food prices.
The faster-than-expected monthly gain beat the 4.4-percent increase in June and sent combined inflation up to 3.5 percent in the first seven months of this year.
Food costs, accounting for a third of the CPI basket, surged 15.4 percent last month, and remained as the main driver of the rise in inflation after increasing costs of foodstock pushed up meat prices.
The central bank has increased borrowing costs four times and ordered lenders to set aside larger reserves on several occasions this year in a bid to curb prices.
The latest rise in interest rate was announced last Tuesday with the benchmark lending rate up 0.18 percentage point to 7.02 percent.
Ma Jun, chief economist at Deutsche Bank Hong Kong, expected another interest rate hike in the second half of September as inflation rises.
Ma estimated that August's growth in the CPI may settle at around six percent from a year earlier, beating the 5.6-percent rise in July on the back of higher food costs.