The Chinese economy continued to show a sustained growth rate in the first quarter, with an annual growth of Gross Domestic Product (GDP) of 9.7%, but the inflation accelerated to 5.4% in March, its highest level since July 2008, announced Friday the National Bureau of Statistics (NBS), according to AFP.
In the fourth quarter of the last year, the Chinese economy grew by 9.8% on an annual pace, after a growth of 9.6% in the third quarter. In 2010 China’s GDP grew by 10.3%, which enabled the country to top Japan for the second world economy.
‘The national economy has maintained its fast development and started the year very well”, said NBS spokesman, Sheng Laiyun.
In the first quarter, industrial production increased by 14.4% and fixed capital investment rose 25%, announced NBS. The retail sales in the same period increased by 16.3%.
Also, throughout the first quarter consumer, price growth reached 5%, despite a series of measures adopted by the authorities in Beijing, in an effort to tighten the monetary policies.
“Keeping inflation at five percent was not an easy task,” said Sheng Laiyun, as the food prices have increased by 11% in the first quarter, while rent rose by 6.5%.
Rising prices is not surprising given the level of bank loans in the first quarter. The central bank announced a few days ago that the volume of new loans granted by Chinese banks has increased sharply in March, compared with February, by up to 679.4 billion Yuan (72.02 billion Euros).
In order to control credit growth, China’s central bank increased its base rate four times in the period since October 2010, and also increased the bank reserves to a record high of 20 percent.
In 2011 China aims to achieve a GDP growth of eight percent and a price increase of four percent.