Economy

China to see more interest rate hikes in Q2

(Xinhua)
Updated: 2011-04-13 17:08

HANGZHOU - China is expected to raise interest rates another two times in the second quarter of this year in an effort to counter persistent inflation pressures, a chief government economist said Wednesday.

The full-year inflation would be held between 4 and 5 percent this year, Fan Jianping, head of the economic forecast department at the State Information Center, said in Hangzhou, Zhejiang province.

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The central government aims to keep the consumer price index (CPI), a main gauge of inflation, at around 4 percent this year, according to the government work report to the parliament in March. However, Fan said it is almost impossible for China to keep CPI below 4 percent this year.

China's CPI rose 4.9 percent year-on-year in February, the same level as in January. The CPI data for March is scheduled to be released later this week and is estimated to show a rise above 5 percent.

To ease inflation pressures, China has hiked interest rates twice and raised the reserve requirement ratio of banks three times this year.

Fan said that the first half of this year will see frequent tweaks to the country's monetary policy but the following period will be more stable in terms of policy adjustments.

He forecast that China's GDP growth will slow to 9.2 percent in the first quarter from the 9.8 percent in the fourth quarter of last year. Full-year economic growth is expected to be 9.5 percent, he added.

He also said China's economy will expand at an annual rate of 9 percent to 10 percent in the five years to 2015.