Bloomberg News

China 2012 Inflation to See ‘Clear Deceleration,’ Planner Says

February 14, 2012

Feb. 14 (Bloomberg) -- China’s inflation could ease to below 4 percent for the first time in 17 months in February and the full-year rate will see a “clear deceleration” from 2011, an official with the nation’s top economic planning agency said.

Consumer-price gains in February will see a “marked” decline due to a drop in food costs and comparatively high prices in the same month last year, Zhou Wangjun, vice director of the pricing department at the National Development and Reform Commission, said in a webcast with the Xinhua News Agency yesterday. A transcript was posted on the agency’s website.

Moderating inflation may offer Premier Wen Jiabao more room to ease policies to support growth in the world’s second-biggest economy after a drop in exports and smaller-than-forecast new lending last month pointed to slowing expansion. Wen said the nation needs to start fine-tuning economic policy this quarter, according to a Xinhua report yesterday.

Zhou said the pace of February’s consumer-price gains may fall below 4 percent or even to “around” 3 percent. The rate averaged 5.4 percent in 2011 and was last under 4 percent in September 2010, according to statistics bureau data.

Even so, Zhou warned that “we should not be too optimistic” as “many uncertainties remain.”

China’s inflation unexpectedly rebounded to 4.5 percent in January from a year earlier, the first acceleration in six months, a government report showed last week. The rate was 4.1 percent in December. Zhou attributed the increase to the impact of the western New Year and Chinese Lunar New Year holidays and inclement weather that affected transportation of goods.

--Zheng Lifei. Editors: Nerys Avery, Scott Lanman

To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at lzheng32@bloomberg.net

%CNY NDRZ CH <Equity> CN

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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