BEIJING, Aug. 9 (UPI) — China’s inflation rate jumped to 6.5 percent in July, the government said Tuesday amid plunging global stock prices.
The July consumer price index, the main gauge of the country’s inflation, was up from June’s 6.4 percent and a hit a 37-month high, the National Bureau of Statistics said.
The announcement comes as markets around the world teeter in response to economic shocks including the downgrading of U.S. debt to double-A+ from triple-A by Standard & Poor’s, growing concern about the debt crisis in Europe and the fear of a double-dip recession.
July inflation was blamed on surging food costs, the state-run Xinhua news agency reported, adding the high inflation puts the government in a tough position with worsening global liquidity in sight.
China’s Inflation has remained stubbornly high and far above the government’s target of 4 percent, despite numerous measures by its central bank.
Food costs rose by 14.8 percent in July from a year ago, with the price of pork, a staple food in China, soaring 57 percent in July.
Separately, the Producer Price Index, which is used to calculate inflation at the wholesale level, jumped 7.5 percent year-on-year in July.
Asian stock prices opened sharply lower Tuesday after the carnage on the New York Stock Exchange, where the Dow Jones index closed 635 lower with other indices following suit. China is the largest creditor nation to the United States.
China’s central bank has raised interest rates five times and cash reserve requirements for banks nine times since October in an effort to contain inflation.