Society

More Chinese say Q2 prices high

(Xinhua)
Updated: 2011-06-16 13:31

BEIJING - More urban depositors were less satisfied with price levels in the second quarter and had weakening expectations of rising inflation, a central bank survey showed Thursday.

The People's Bank of China found in its latest quarterly survey of urban bank depositors that 68.5 percent found prices in the second quarter "high and unendurable", up 1.3 percentage points from the first quarter.

The survey said 45.4 percent of respondents expected price increases in the third quarter, down 1.7 percentage points from the first quarter.

The consumer price index (CPI), the main gauge of inflation, accelerated to a 34-month high of 5.5 percent year-on-year in May, up from 5.3 percent in April. Analysts estimate inflation will rise above 6 percent in June.

The central bank on Tuesday decided to hike the reserve requirement ratio for the sixth time this year, effective as of June 20, to check stubbornly high inflation. It also raised interest rates twice this year.

It said taking into account current prices, interest rates and income levels, residents are more inclined to consume and deposit rather than to invest.

Findings showed 83 percent of urban residents prefer putting money in banks (deposits, investments in bonds and stocks) and 17 percent are inclined to consume more.

As for investment options, property remained the top option for 22.2 percent of residents, but down 2.8 percentage points from the first quarter, according to the survey.

Further, the survey found 74.3 percent of residents said housing prices in the second quarter were "too high to afford", almost the same with that of the first quarter.

More than one third of respondents anticipated home prices to stay stable in the second half of the year and 25.9 percent said prices would continue to rise, while 18.9 percent expected a decline in prices, the survey said.

The central bank carried out the quarterly survey among 20,000 urban bank depositors in 50 major cities.