Consumer prices in China continued to grow at a rapid rate in the second month of the year as officials struggle to contain mounting inflationary pressure, according to The Wall Street Journal. On Friday, the Nation Bureau of Statistics for China reported that the countrys consumer-price index added 4.9% in February from one year earlier, matching the rate of inflation recorded in the previous month and outpacing economists forecast for price growth. The latest price inflation is above the official government target for the full year of around a 4% increase.
Premier Wen Jiabao said the government would make it our top priority in macroeconomic control to keep overall price levels stable, and policymakers have raised interest rates three times since October. Meanwhile, producer prices were seen 7.2% higher year-over-year in February. The Peoples Bank Of Chinas Governor Zhou Xiaochuan said, In this situation, interest-rate policy is definitely an important tool that needs to be used, although he acknowledged officials would need to be prepared for surging capital inflows.