China's CPI to stand 3% this year: NDRC

Updated: 2010-07-16 21:16
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BEIJING - China's consumer price index (CPI), the main gauge of inflation, will be maintained at around 3 percent for the rest of the year, given the abundant food supplies and eased inflationary expectations, the country's top economic planner said Friday.

The National Development and Reform Commission (NDRC) predicted that the CPI would decline beginning in October, according to a statement posted on its website.

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The statement further said that China's economy would grow steadily over the rest of the year as supply and demand are set to be balanced.

China has abundant grain reserves, although its summer grain output fell 0.3 percent to 123.1 million tons in 2010, marking the first fall in seven years.

Inflationary expectations are likely to diminish in coming months with various measures introduced by the government to strengthen price controls and management, the statement said.

Government data issued Thursday showed China's CPI rose 2.6 percent for the first half of the year, below the 3 percent full-year target ceiling the government set in March.

Imported inflation pressures would also be reduced as China broke the yuan's 23-month-dollar peg in June, which increased the flexibility of its currency.

Also, agricultural products on global markets brought less than those on domestic markets, which also helped contain imported inflationary pressures.

Additionally, the government would maintain stability and continuity in macro policies and make macro control more flexible and better targeted over the rest of the year, the statement said.

It would also use all tools to stabilize prices and manage inflationary expectations to create a favorable environment for the country's stable and relatively fast economic growth.