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China raises inflation target to 4.8pc PDF Print E-mail
Friday, 29 February 2008

Agence France-Presse . Beijing

China has raised its inflation target for 2008 to 4.8 per cent due to steeper-than-expected price rises last year and the impact of the worst winter in 50 years, state media said Wednesday.

The government had aimed to control inflation this year at the 2007 level and in December set the target at 4.6 per cent, equivalent to the figure for the first 11 months of the year, the 21st Century Business Herald reported.

But it now feels forced to lift the target as inflation spiked at the end of 2007 and further surged to an 11-year high of 7.1 per cent in January after the worst winter weather in five decades hit China late in the month, it said.

The new target is expected to be officially announced at the National People's Congress, the nation's parliament, which will open next week. However, even before the new target has been officially announced, forecasts have started to appear suggesting that it, too, may be hard to achieve.

State Information Centre, a key government think tank, has predicted inflation will hit five per cent this year. Last year, the government set the inflation target at three per cent, but since then it has spiked, especially due to higher food prices.

Inflation is a key concern for the political leadership, and the central bank has warned it may raise interest rates further — on top of six rate hikes last year — to keep it in check.

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