Economy

Economic planner rejects stagflation risk report

(Xinhua)
Updated: 2010-06-04 22:16

BEIJING - China's National Development and Reform Commission (NDRC), the top economic planner, refuted a report on Friday claiming China is facing stagflation risks, arguing the national economic growth might slow slightly but stagflation is not going to occur.

The NDRC response followed the release of a domestic report that claimed rising inflation and slowing economic growth would lead to stagflation in China.

Related readings:  NDRC says vegetable prices to decline further  Cabinet OKs NDRC gradual property tax reform  NDRC urges enhanced pricing regulations  China mulls unified GDP calculation: NDRC

The NDRC added that the report was inaccurate and likely to cause misunderstandings and confusion, according to a statement released on its website.

The statement went on to say growth in China's gross domestic product (GDP) was likely to slow down this year because of a higher comparison base used in the second half of last year, but it would still be one of the world's strongest growth rates and should not be labeled as "stagflation".

Further, the NDRC noted that the consumer price index (CPI), a major gauge of China's inflation, was likely to exceed the government's 3-percent growth target in several months, but "there is a foundation to achieve the full-year CPI target of 3 percent" as long as China continued improving macro-regulations, it said.

The NDRC statement noted that China would see "stable and comparatively fast economic growth" and "a moderate consumer price increase" this year.

China's GDP rose 11.9 percent from a year earlier during the first quarter of this year. The CPI increased 2.4 percent year on year in March while the growth for April accelerated to 2.8 percent, according to the National Bureau of Statistics (NBS).

The NBS is scheduled to release May economic data, including the CPI, fixed asset investment and retail sales, on June 11.