NDRC Expects Mild Inflation in 2010

(Caixin Online) High inflation is almost unlikely in 2010 because of a general excess supply and increased grain and pork output, the National Development and Reform Commission said recently.

Consumer prices climbed in recent months, prompting inflation concerns in 2010. "Effective measures must be taken to manage inflation expectations and leave the room for pricing reforms," said Li Pumin, spokesman for the NDRC.

As overall supply has surpassed demand, marked by grain output growth for six consecutive years and strong growth in hog-farming, there is little chance for high inflation in 2010, he said. Nonetheless, he pointed out that ample liquidity at banks and price hikes in international commodities markets could cause inflation in China.
 
"Domestic and international price changes will be carefully monitored," Li said, adding that regulation of prices will be strengthened.

The consumer price index (CPI) is expected to be around 3 percent this year, according to a government work report delivered by Premier Wen Jiabao last Friday to the 11th National People's Congress.

In 2009, CPI was 0.7 percent lower than that in 2008. The inflation indicator was positive for the first time last November and was 1.5 percent last January compared with a year earlier. Many independent analysts predict 3 percent inflation for 2010.