(Xinhua)
Updated: 2008-01-11 22:55

In the first 11 months of 2007, the CPI grew 4.6 percent, according to the National Bureau of Statistics (NBS).

And the annual figure is estimated to stand at 4.7 percent, far higher than the government-set alarm level of 3 percent.

The report attributed the risks to huge demand of capital goods fueled by fast economic growth, the expanding imbalance of international payments, high prices of natural resource commodities in the domestic and international markets, increasing money supply and soaring housing price.

The CAS experts suggested that, besides the macroeconomic policies already in operation, the country should ensure the food supply to deal with the price hikes at the source.

It should be done to improve the state stock of commodities and speed up tax reform policies on natural resource commodities such as oil and natural gas, the report said.

A healthy real estate market will also contribute, it said.

With effective measures, the CPI growth is likely to slow down in June or July, according to the report.

Taming inflation has been a red hot issue in recent months. The country announced in late December a tight monetary policy for the first time in the past ten years and the central bank increased the interest rates six times last year.

The CAS report also predicted that the primary, secondary and tertiary industries will expand at 4.1 percent, 12 percent and 11.5 percent, respectively.

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