NDRC: Inflation will ease in Feb.

   Date:2012-02-15

China's January inflation came in higher than expected, raising concern about prices after the figure eased in recent months. However, analysts and officials alike point to the Lunar New Year holiday as the reason behind the spike, and say that inflation is still on a downward trend.

Analysts say that January’s higher than expected inflation was boosted by higher demand during the Chinese New Year holiday.


A vendor waits for customers at her vegetable stall at a market in Shanghai February 9, 2012.

In February, officials at the nation’s top economic planner say CPI will pull-back, and remain at lower levels for the rest of the year.

Zhou Wangjun, deputy director of NDRC, Department of Price, said: "I personally expect China’s inflation rate may slow to between 3 to 4 percent in February. Price should get back to a reasonable level after the Lunar New Year holiday. "

But Zhou Wangjun notes that major uncertainties still exist.

Zhou said: "For example, global crude oil prices and weather’s influence on farm products...all of these are uncertain factors for inflation. Commodity prices have gone up recently, including grain and iron ore. So the possibility that inflation could pick up still exists. "

Food is the most volatile contributor to China’s consumer price index, but the NDRC notes that other prices have remained stable. And it forecasts pork prices to come down after the holiday season.

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