Beijing: China's inflation may accelerate to 5 per cent this month from a year ago, exceeding the government's 2011 target, the China Securities Journal reported, citing the nation's top economic planning agency.
Consumer prices in the first quarter may have gained about 4.9 per cent from a year earlier, according to the Beijing-based newspaper which cited a report by the pricing department of the National Development and Reform Commission. That would be the same pace as increases in January and February. In the first half, consumer prices may rise 4.8 per cent to 5 per cent, the report said.
China's central bank has increased the reserve requirement for banks three times and raised benchmark interest rates once this year to contain inflation, which Premier Wen Jiabao on March 5 targeted as the nation's top economic priority. Morgan Stanley Asia non executive chairman Stephen Roach said yesterday Central Bank Governor Zhou Xiaochuan admitted in a meeting that monetary policy needs further tightening.
Inflationary pressures from food and home prices are unlikely to cause further acceleration in consumer-prices gains in the second quarter, the newspaper cited the planning agency's report as saying. The pace of growth will slow in the second half, according to the report.
Li & Fung Ltd., the biggest supplier of consumer products including clothes, toys and furniture to retailers worldwide, said yesterday that factories providing these goods may raise prices as much as 30 per cent this year due to higher labour and material costs.
