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People's Daily Online>>China Business

Cheaper food costs likely to ease inflation

By Wang Yanlin (Shanghai Daily)

09:47, March 08, 2012

THE drop in food prices may see China's inflation in February weaken sharply to about 3.2 percent, which may end a two-year period of negative de facto interest rates, some economists said.

The easing inflationary pressure will create more room to unveil fiscal and monetary stimulus measures but implementation will be gradual as the government will continue to control price rises as a priority, they said.

"Falling food costs after the Spring Festival have helped ease inflation," said Tang Jianwei, an economist at the Bank of Communications. He estimated the inflation rate for February at 3-3.4 percent.

The National Bureau of Statistics is set to release the key economic data for February tomorrow.

The Consumer Price Index unexpectedly rose 4.5 percent to a three-month high in January because of higher food costs.


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