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Shanghai inflation up 2.6% in Feb: Shanghai Statistics Bureau

Shanghai inflation up 2.6% in Feb: Shanghai Statistics Bureau

SHANGHAI: Shanghai Statistics Bureau reported that Shanghai’s inflation grew 2.6 percent from a year earlier in February, sharply up from January’s gain of 1.8 percent and more than national average of 1.4 percent.

Seasonal factors were blamed for the sharp acceleration as the Chinese New Year started in February this year while it began in January last year, the bureau said. Food costs gained 2.8 percent due to the holiday effect while prices of clothes jumped 14.6 percent.

In the first two months, Shanghai’s inflation added 2.2 percent, below the target of curbing it within 3 percent for this year.

But the city’s economy showed signs of a slowdown as real activity weakened.

Industrial production edged up 0.6 percent year on year in the first two months, down from the growth of 3.1 percent in December last year.

Retail sales rose 8.1 percent to 158 billion yuan (US$25.2 billion) in the two months combined, compared with an 8.3 percent increase in December.

Fixed-asset investment gained 2.1 percent to 67.5 billion yuan during the period, compared with last year’s rise of 6.5 percent. But investment in the property sector rose 13.5 percent, countering the drop of 23.9 percent in infrastructure construction and the loss of 15.6 percent in manufacturing.

“Shanghai’s economy seems to got off to a very weak start,” said Li Maoyu, an analyst at Changjiang Securities Co. “The city needs to beware of the risk of a sharp economic slowdown.”

Shanghai’s gross domestic product grew 7 percent last year, slowing from the gain of 7.7 percent in 2013 and lower than the national average.

But Mayor Yang Xiong said Shanghai’s economic slowdown is not putting pressure on the city.

“Shanghai will continue to accelerate industrial upgrading, optimize trade and develop strategic new industries to sustain the city’s growth,” Yang said in late January.