China's consumer inflation picked up pace in August, rising 1.3 percent from a year earlier as services became more expensive, official data showed Monday. The rise in consumer prices was led by a 2.3 percent increase in prices for services, with housekeepers' and household repairmen's salaries rising 5.9 percent from a year earlier, the National Bureau of Statistics said.
Consumer price inflation last month was up slightly compared with a more modest one percent increase in July but observers said there was little reason to worry as the absolute figure remains very modest.
"As long as the index rises by less than four percent, there are no big problems for the economy as a whole," said Ning Xiangdong, a economics professor at Tsinghua University.
In the period from January to August, consumer prices rose 1.2 percent from the same eight months in 2005.
The consumer price index was released amid unclear signals about where exactly Chinese prices are heading.
The index for producer prices, which some economists say gives a more accurate picture of inflation trends in China, rose 3.4 percent in August after a 3.6 percent gain in July.
The Asian Development Bank on Friday cut China's inflation forecast for 2006 to 1.6 percent from 2.3 percent, saying higher costs of gasoline (petrol), electricity and services have had a smaller-than-expected impact on overall prices.
Overcapacity in some industries such as steel and manufactured goods is also capping price gains while a bigger grain harvest has also worked to keep prices in check, the ADB said.
Source: Agence France-Presse
