China projects 4 percent consumer price riseMarch 5th, 2012 - 8:24 pm ICT by IANS
Beijing, March 5 (IANS) China has projected a four percent growth in consumer prices this year.
In doing so, “we have taken into account imported inflation, rising costs of factors of production, and people’s ability to absorb the impact of price increases, while leaving room for the effect of price reforms,” Prime Minister Wen Jiabao said Monday in his report to the annual parliamentary session.
Keeping overall prices stable is “a key task affecting the people’s interests and China’s overall economic and social development”, he said.
“We will control prices and prevent inflation from rebounding by effectively carrying out macroeconomic policies, managing the supply of money and credit, and striving for basic equilibrium in aggregate supply and demand,” China Daily quoted Wen as saying.
The country’s consumer price index (CPI), the main gauge of inflation, rose 5.4 percent year-on-year in 2011, exceeding the government’s full-year target of 4 percent set at the beginning of 2011 as food prices jumped 11.8 percent and prices of farm produce surged 16.5 percent.
To contain runaway inflation, China’s central bank, the People’s Bank of China, had raised the banks’ reserve requirement ratio (RRR) 12 times to a record high of 21.5 percent between 2010 and December 2011. The bank has also hiked interest rates five times since October 2010.
In January, the holiday effect lifted the country’s consumer price growth to 4.5 percent year-on-year, but it was still significantly lower from a 37-month high of 6.5 percent in July last year.
Wen pledged the government will continue to implement a proactive fiscal policy and a prudent monetary policy this year.