Chinese inflation growing as economy surges forward


China’s economy continued to grow in March although inflation is accelerating at its fastest rate since 2008.

Growth was at a faster-than-expected 9.7% between January and March compared with the same period a year earlier, the National Bureau of Statistics said.

Last month consumer prices rose by 5.4%, compared with the previous March. In February, the annual figure was 4.9%.

The government has been taking steps to try to limit the increase of property and food prices.

Chinese inflation has been accelerating despite four interest rate rises since October.

“The figures are higher than market expectation, especially the CPI (consumer prices index), which means the inflationary pressure is really big,” said Nie Wen from Hwabao Trust in Shanghai.

“So I think the tightening measure will continue.”

Chinese President Hu Jintao said on Friday that China’s economic growth was still unbalanced.

He pledged to boost the role of domestic consumption in the economy. Mr Hu made the comments at Asia’s version of the World Economic Forum, taking place in Boao on the Chinese Island of Hainan.

This week, Prime Minister Wen Jiabao said that the government would use all the tools at its disposal to tackle inflation..

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