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No slowdown as first quarter GDP up 9.7% while CPI up 5%
By Wang Yanlin |
April 15, 2011, Friday
|
Online Edition
Online Edition
CHINA'S economy grew at a steady pace in the first quarter, but inflation hit a 32-month high in March, triggering concerns of stagflation that requires more subtle macroeconomic measures.
The country's gross domestic product expanded 9.7 percent from a year earlier to 9.63 trillion yuan (US$1.45 trillion) in the first three months, the National Bureau of Statistics said today.
The pace slowed down from the expansion of 9.8 percent in the previous quarter but was much higher than the nation's target of 8 percent for this year.
Despite a stable growth, China's inflation grew more than expected. Consumer Price Index, the main gauge of inflation, climbed 5 percent on an annual basis in the first three months. In March alone, the index surged 5.4 percent, further up from January and February's 4.9 percent.
"Moderation in China's economy contrasts with the continuous rise of inflation," said Li Maoyu, an analyst at Changjiang Securities Co. "We can't rule out the possibility of stagflation, and policymakers need to prepare new measures to cope with the delicate situation."
Stagflation refers to a period of economic stagnation accompanied by inflation.
However, statistics bureau spokesman Sheng Laiyun denied stagflation in the country at the moment.
"China's economy grew at a comparatively strong pace in the first three months, and inflation is still under control with the government's determined efforts to stabilize prices," Sheng said at a media briefing in Beijing today.
He said compared with March inflation in some other emerging markets, such as Brazil which reported an annualized 6.3 percent CPI, and Russia whose figure was 9.5 percent, it was not easy for China to render such a performance.
But Sheng also said the government should get better prepared when economic uncertainties are on the rise. A consistent policy stance is promised.
China's monetary policy has shifted to a prudent stance since the end of last year to avoid an overheated economy, and kept the fiscal policy stance relatively easy.
The central bank has commanded two interest rate increases so far this year, together with three lifts of reserve requirement ratio to curb inflation.
The country's gross domestic product expanded 9.7 percent from a year earlier to 9.63 trillion yuan (US$1.45 trillion) in the first three months, the National Bureau of Statistics said today.
The pace slowed down from the expansion of 9.8 percent in the previous quarter but was much higher than the nation's target of 8 percent for this year.
Despite a stable growth, China's inflation grew more than expected. Consumer Price Index, the main gauge of inflation, climbed 5 percent on an annual basis in the first three months. In March alone, the index surged 5.4 percent, further up from January and February's 4.9 percent.
"Moderation in China's economy contrasts with the continuous rise of inflation," said Li Maoyu, an analyst at Changjiang Securities Co. "We can't rule out the possibility of stagflation, and policymakers need to prepare new measures to cope with the delicate situation."
Stagflation refers to a period of economic stagnation accompanied by inflation.
However, statistics bureau spokesman Sheng Laiyun denied stagflation in the country at the moment.
"China's economy grew at a comparatively strong pace in the first three months, and inflation is still under control with the government's determined efforts to stabilize prices," Sheng said at a media briefing in Beijing today.
He said compared with March inflation in some other emerging markets, such as Brazil which reported an annualized 6.3 percent CPI, and Russia whose figure was 9.5 percent, it was not easy for China to render such a performance.
But Sheng also said the government should get better prepared when economic uncertainties are on the rise. A consistent policy stance is promised.
China's monetary policy has shifted to a prudent stance since the end of last year to avoid an overheated economy, and kept the fiscal policy stance relatively easy.
The central bank has commanded two interest rate increases so far this year, together with three lifts of reserve requirement ratio to curb inflation.
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