(Yicai Global) Aug. 11 -- China’s consumer price index, a gauge of consumer inflation, could edge past the government’s target limit of 3 percent some months during the remainder of the year as pressures from structural inflation increase, the country’s central bank said yesterday.

Consumer inflation in the second half will be higher than the average 1.7 percent logged in the first half, the People’s Bank of China said its second-quarter monetary policy report.

In July, the CPI rose at the fastest clip in two years, reaching 2.7 percent, and not far below the 3 percent limit, according to data released by the National Bureau of Statistics yesterday.

China’s CPI basket is relatively sensitive to swings in food prices, especially pork prices, the PBOC said. The price of pork surged 20.2 percent in July year on year, while that of fresh fruit jumped 16.9 percent and that of fresh vegetables 12.9 percent.

A new round of pork price hikes has started and this may push up growth in the CPI's food category, it said. Also, earlier increases in the producer price index, a measure of industrial profits, may soon pass on to consumer prices as consumption bounces back following the fallout from the recent Covid-19 outbreaks.

Many major economies have been experiencing high levels of inflation, not seen in decades. Imported inflationary pressure together with domestic structural inflation means an increase in the price of some goods is possible and this must be taken seriously, it added.

The PBOC will continue to ensure the stable and moderate growth of credit, implement a variety of monetary policy instruments to keep liquidity ample and maintain reasonable increases in money supply and social financing, it said. Structural monetary policy tools will highlight financial support for key areas.

Editor: Kim Taylor