The Straits Times
www.straitstimes.com
Published on Jan 11, 2013
 

China's inflation jumps to 6-month high

 
 

BEIJING (AP) - China's inflation spiked to a six-month high in December after a freezing winter pushed up vegetable prices, possibly complicating efforts to sustain a shaky economic recovery.

Consumer prices rose 2.5 per cent over a year earlier, up from November's 2 per cent and the fastest rise since June, the National Bureau of Statistics reported.

That was driven by a 14.8 per cent jump in vegetable prices after the coldest winter in seven years led to smaller harvests. Prices in some areas rose as much as 40.8 per cent.

Higher inflation could hamper Beijing's ability to support China's recovery with interest rate cuts or other moves for fear of igniting a politically dangerous price spiral. Consumer prices are especially sensitive in a society where the poorest families spend up to half their monthly incomes on food.