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Central bank upbeat on economic growth

By Xiao Xin (China Daily)
Updated: 2007-06-30 07:35

The central bank said on Friday that economic growth will remain strong this year, with gross domestic product (GDP) growing 10.8 percent on 2006.

It said GDP growth in the first half of this year will be 11 percent.

The consumer price index (CPI), a major gauge of inflation, will be 3.2 percent, crossing the warning line of 3 percent set by the central bank, according to its report published in the China Securities Journal. Inflation will be 3 percent in the first six months.

Pork prices have risen strongly on increasing grain prices that have pushed up feed costs and diseases that have reduced supply, the report said.

Blue ear disease, or porcine reproductive and respiratory syndrome, caused a large number of pig deaths and mass culling in China last year.

The report said house prices in China and international oil prices will continue to rise. It said rising house prices were the result of strong demand and short supply.

High non-ferrous metal prices on the international market and oil prices, which may continue to rise, are the major factors that will push up prices in the coming months, according to the report. The country's energy-saving policies and reform of resource products and labor price rises will also contribute, the report said.

Inflation, which hit a two-year record high of 3.4 percent in May, will moderate later this year, reflecting a slower rise in production prices, the report said.

(China Daily 06/30/2007 page10)