China Inflation at Worrisome 2.8% on Food Price Surge

China’s inflation accelerated to 2.8 percent in April, driven by a jump in politically sensitive food prices, adding to pressure for Beijing to cool its economic boom and a surge in living costs.

Food price inflation accelerated to 5.9 percent over a year earlier, up from March’s 5.2 percent rate, the National Bureau of Statistics announced Tuesday. Overall April inflation was up 0.4 percent from the previous month.

Foreign companies and investors are closely watching China’s inflation because any moves by Beijing to curb price rises might slow economic growth, with repercussions for the global recovery if it hurts demand for imported iron ore and other materials.

Inflation has been driven lately by surges in the cost of food and housing. Food prices are up partly due to shortages caused by dry weather, while housing prices have been driven by a flood of bank lending to support Beijing’s stimulus.

Housing prices in 70 Chinese cities climbed 12.8 percent from the same time last year, despite government efforts to cool prices, the statistics bureau said.

Wholesale prices climbed 6.8 percent in April from a year earlier, a 0.9 percent increase over March’s rise. That can lead to higher consumer prices down the line as retailers pass on higher costs.

The government gave no breakdown of food costs, but the Commerce Ministry said earlier that vegetable prices surged by 32.3 percent over a year earlier between March 29 and April 25. The price of eggs and fish rose 6.6 percent.

BEIJING (AP)