China’s economy expanded 9.7 percent in the first quarter of 2011 from a year earlier, and 2.1 percent from the previous quarter to 9,631.1 billion yuan ($1,459.3 billion), the National Bureau of Statistics (NBS) said Friday.
“The national economy had a good beginning with steady and relatively fast growth,” said Sheng Laiyun, spokesman of the NBS.
In the fourth quarter of 2010, the economy grew 9.8 percent year on year from 9.6 percent in the third quarter, after slowing down from 11.9 percent in the first quarter and 10.3 percent in the second.
Consumer inflation hits 32-month high, more rate hikes in sight
China’s consumer price index (CPI), a main gauge of inflation, rose 5.4 percent in March from a year ago, a 32- month high, the nation’s statistic agency said on Friday.
CPI stood at 5 percent for the first quarter, according to the National Bureau of Statistics (NBS).
Food prices surged 11 percent year-on-year.
Sun Chi, an analyst with the Nomura Securities, said inflation pressure would persist for a period of time, which indicated it was only early days in the monetary tightening circle.
“We expect the interest rate will be lifted by another 75 basis points this year. The bank’s reserve requirement ratio will be increased by another 100 basis points,” he said.
Chinese Premier Wen Jiabao said Wednesday that keeping the price levels basically stable was the primary and most urgent task for the government’s macro economic control this year.
“Judging from the inflation situation in the first quarter, we are still under great pressure of price hikes,” Wen said, adding, “We should never lower our guard.”
Wen expected inflation pressure to continue in the coming months due to soaring commodity prices around the world, higher food and housing prices, and higher labor costs in China.
The People’s Bank of China, the central bank, announced the second interest rate hike this year on April 5. It was also the fourth increase since the start of 2010.
After the increases, the one-year deposit interest rate will climb to 3.25 percent while the one-year loan interest rate will reach 6.31 percent.
To mop up the excessive liquidity that helps fuel inflation, China’s central bank has raised the reserve requirement ratio for commercial banks nine times since the beginning of last year.
March PPI growth advances to 30-month high
China’s producer price index (PPI), a main gauge of inflation at the wholesale level, rose 7.3 percent in March from a year ago, the highest in the past 30 months, the statistical agency said on Friday.
PPI was up 0.6 percent from February. The quarterly PPI was up 7.1 percent year-on-year, the National Bureau of Statistics (NBS) said.
China’s consumer price index (CPI), a main gauge of inflation, rose by a 32-month high of 5.4 percent in March.
The Chinese Premier Wen Jiabao warned on Wednesday that the country should never lower its guard against inflation, and expected inflation pressure to continue in the coming months due to soaring commodity prices on global markets, higher food and housing prices, and higher labor costs at home.
The purchase prices of major industrial materials increased 10.2 percent in the first quarter year on year, and was up 10.5 percent in March, the NBS said.
– Xinhua