BEIJING — Prices in China are rising quickly for food and other commodities, increasing pressure for policymakers tasked with keeping growth stable.
Food prices in China rose every week in October, according to data on edible agricultural products from the country’s Ministry of Commerce.
A basket of 30 vegetables hit 5.99 yuan per kilogram ($2.06 a pound) in the week ended Oct. 31, up 6.6% from the prior week. In the week ended Sept. 26, the price per kilogram had been 4.39 yuan ($1.51 a pound).
The inflationary pressure and the tightening trajectory of other countries’ monetary policy will limit the scope China has to ease its monetary policy, said Bruce Pang, head of macro and strategy research at China Renaissance.
Limited ability to ease monetary policy means China will require more support from fiscal and industrial policies to prevent stagflation, Pang said. He expects the economy can still grow by about 4% to 5% in the fourth quarter.
Stagflation is an economic phenomenon in which prices rise but business activity stagnates, leading to high unemployment and reduced consumer spending power.
Overnight, the U.S. Federal Reserve said it would begin cutting back on asset purchases — a move away from pandemic-era stimulus and toward monetary policy tightening
