金融英语阅读：No break from inflation
Despite the nation's top economic planner releasing three separate statements aimed at wrestling inflationary forces to the ground, economists Wednesday said current price levels would likely stay the same through next year.In the National Development and Reform Commission's (NDRC) statement Wednesday - its third in as many days - it urged local governments to adhere to price control guidelines issued last Wednesday by the State Council. In addition, local officials were encouraged to intensify efforts to cap rising prices and snuff out market speculation.
Economists said, however, current price levels are expected to hold throughout the course of next year, and that a return to previous lows is unlikely.
In a show of determination, authorities have taken strong tightening measures, showing an intolerance for excess inflation. However, with the global economy still vulnerable, China's central bank is in an awkward position, facing upside risk of inflation as well as downside risk of stagflation, Takuji Okubo, Societe Generale's chief economist in Asia, told reporters in Beijing Wednesday. The complex situation makes it difficult to predict a drop in inflation levels anytime soon, Okudo said.
China's annual Central Economic Work Conference, expected to be held next month, is likely to raise the official inflation target from 3 percent this year to 4 percent next year, the Chinese-language China Business News reported Wednesday, citing an unnamed source. The conference reviews the year's economic performance and sets the tone for policy-making next year.
The strong momentum of China's economic growth was generated by the nation's huge stimulus package and relatively loose monetary policies, which are necessary during times of economic crisis, Okudo explained. But these are now starting to gradually have a negative effect on the economy.
Okubo estimated an interest rate hike of 25-basis points would come before the end of the year, followed by another hike of 75-basis points for next year.
Last month, the central bank hiked rates by 25 basis points, the first time in nearly three years. On Friday, the central bank also announced a 50 basis points rise in reserve ratio, the fifth hike this year.
These tightening measures were urged as China's CPI - a gauge of inflation - hit 4.4 percent in October compared with the previous year, the highest level in 25 months.
The CPI is expected to trend upwards to around 5 percent in November while moderating in December, Wang Tao, head of China Economic Research with UBS Securities, said in a note Friday.
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