Goldman: CPI could reach 7% in October
8 November 2007
China's consumer price index, a major indicator of inflation, will rise to 7% or even higher in October and the later months of this year, according to Goldman Sachs' latest estimation, Economic Observer reported (in Chinese). The investment bank adjusted its prediction as food prices rose in late October after a slight fall in September. However, the main price pressures on the economy come from increasing production costs on the back of higher prices of raw materials such as oil rather than supply shortages, said Hong Liang, Goldman Sachs' chief economist. The bank is projecting China's central bank to increase interest rates twice more this year as a result of increased inflationary pressure.