Chinese inflation soars in March

| April 15, 2011 | 0 Comments
Chinese inflation soars in March

Figures have today revealed the Chinese economy expanded 9.7% in the first quarter - much better than expected.

The data from the National Bureau of Statistics said it was the fastest rate since 2008.

The economy, which is the world’s second largest, has been the world’s fastest growing nation over the last two decades and is forecasting growth of 8% for 2011.

If the current pace of growth continues in China, many believe it will become the world’s largest economy in about 20 years time.

The economy grew by a staggering 10.3% in 2010 – much higher than expected but this fuelled fears of the economy overheating, which has stoked inflation pressures.

Today, figures revealed inflation rose to a 32-month high of 5.4% in March on an annual basis from February’s level of 4.9%.

The latest figures mean inflation is still well in excess of the 3% target set by the Government.

Inflation fears are always a concern to Chinese officials due to the potential for price rises to trigger civil unrest.

Inflationary pressures are rife in Asia and central banks in Indonesia, Vietnam, Thailand and India have all increased interest rates recently.

Last week, the People’s Bank of China lifted interest rates further in order to tame inflation while the Government has taken action to cool property and food prices.

Prime Minister Wen Jiabao reiterated earlier this week that the Government will make reining in prices its top priority.

At a cabinet meeting this week, Mr Wen said: “We will try every means to stabilise prices, the top priority of our economic controls this year and also our most pressing task.”

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