Chinese Inflation Heats Up On High Food Prices

chinese food wok flame fire

Photo: Wikimedia Commons

BEIJING (AP) — China’s inflation edged up in March as the government shifted focus from containing politically dangerous price rises to stimulating its slowing economy.Consumer prices rose 3.6 per cent over a year earlier, up from February’s 3.2 per cent, data showed Monday. That was driven by a 7.5 per cent rise in politically sensitive food costs, up from the previous month’s 6.2 per cent.

Beijing shifted focus from cooling prices to shoring up economic growth after inflation eased from a high of 6.5 per cent in July. Beijing has promised to ease lending curbs to help companies that have been battered by a slump in global demand.

Analysts expect economic growth that has declined steadily over the past year to fall to a new low of about 8 per cent for the three months ending in March, down from 8.9 per cent in the final quarter of 2011. Official data are due to be reported this week.

Forecasters had expected a temporary acceleration in inflation in March but say price rises should moderate in coming months.

The World Bank and International Monetary Fund have warned China and other developing countries to prepare for a possible global slowdown this year.

Chinese leaders tightened lending and investment curbs repeatedly in 2009 and 2010 to cool inflation and guide growth to a more sustainable level. They reversed course in December and promised to loosen controls after an unexpectedly sharp fall in export demand.

The government has yet to announce major changes, but financial analysts say regulators are quietly easing access to credit.

___

National Bureau of Statistics (in Chinese): www.stats.gov.cn

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.