Curb inflation but growth vital
By Wang Yanlin |
March 8, 2011, Tuesday
|
Print Edition
Print Edition
CHINA'S economic data for February, due to be released this week, may present the government with a delicate balance of curbing inflation while ensuring that growth is on track, analysts said.
The trade data will be unveiled on Thursday while inflation and January-February economic figures, including investment, industrial output and retail sales, will be released on Friday.
Wang Qing, a Morgan Stanley economist, said all eyes will be on the headline Consumer Price Index and new loan creation to gauge inflationary pressure and any possible changes in government policy.
"The February consumer prices may come lower than January's reading," Wang said. "But we don't believe it will be the beginning of a downward trend because of the inflationary pressure observed from both food and non-food sectors."
Wang had originally expected CPI, the main gauge of inflation, to rise 5 percent year on year in February, compared with January's 4.9 percent, on rising food costs and residential prices due to tighter moves in the property sector.
But he changed his view on the CPI figure because of a remark made by Zhang Ping, minister of the National Development and Reform Commission. On Sunday, Zhang told reporters that China's February consumer prices will drop from previously high levels, and he was confident inflation would be checked due to abundant grain reserves.
Li Maoyu, an analyst at Changjiang Securities, also held the view that inflation won't be a big problem if the government is determined to control it.
"More tightening measures must be in the pipeline to rein in prices," he said.
Li estimated CPI at between 4.7 percent and 5 percent in February, and interest rates may rise in the second quarter.
The trade data will be unveiled on Thursday while inflation and January-February economic figures, including investment, industrial output and retail sales, will be released on Friday.
Wang Qing, a Morgan Stanley economist, said all eyes will be on the headline Consumer Price Index and new loan creation to gauge inflationary pressure and any possible changes in government policy.
"The February consumer prices may come lower than January's reading," Wang said. "But we don't believe it will be the beginning of a downward trend because of the inflationary pressure observed from both food and non-food sectors."
Wang had originally expected CPI, the main gauge of inflation, to rise 5 percent year on year in February, compared with January's 4.9 percent, on rising food costs and residential prices due to tighter moves in the property sector.
But he changed his view on the CPI figure because of a remark made by Zhang Ping, minister of the National Development and Reform Commission. On Sunday, Zhang told reporters that China's February consumer prices will drop from previously high levels, and he was confident inflation would be checked due to abundant grain reserves.
Li Maoyu, an analyst at Changjiang Securities, also held the view that inflation won't be a big problem if the government is determined to control it.
"More tightening measures must be in the pipeline to rein in prices," he said.
Li estimated CPI at between 4.7 percent and 5 percent in February, and interest rates may rise in the second quarter.
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