April CPI down to 3.3%: Analysts

Updated: 2012-05-08 13:31

By Wei Tian (chinadaily.com.cn)

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The inflation rate in April may fall back slightly from a rebound in the previous month because of retreating food prices. A moderate fluctuation in the curve indicates the Chinese economy is stabilizing, analysts suggested.

A report by the Bank of Communications projected that the growth of the consumer price index, a key gauge of inflation, will decline to 3.3 percent year-on-year in April, compared with 3.6 percent in the previous month.

The official figure by the National Bureau of Statistics will be published later in the week.

The inflationary pressure will continue easing in the second and third quarter of the year but will pick up in the last three months. The year-round CPI growth will slow to 3.3 percent from 5.4 percent in 2011, according to the report.

The country's goal this year is to bring down the inflation rate to within 4 percent, according to the central government's 2012 work report.

Forecasts on the April CPI figure made by most other institutions also fall within 3.3 percent to 3.4 percent and all cited retreating food prices as the main reason for their predictions.

Data from the Ministry of Commerce showed that the price of primary products continued to decline in the first three weeks of April, with vegetables and meat products leading the downward tendency.

Overall food prices in April have declined 1.8 percent from March figures, according to the ministry.

The CPI growth curve will represent a "mini-snake" shape at a low level in the first four months in 2012, a situation viewed by analysts as evidence that the world's second largest economy is stabilizing but is still struggling amid weak demand in investment and consumption.

Wang Tao, chief economist with UBS AG, said as inflation continues to ease, monetary and fiscal policies will be "moderately easing" and an increase in credit support will push up economic growth in the second quarter.