BEIJING: China said Friday its economy grew at a robust but slightly slower pace in the first quarter of 2011 while inflation accelerated despite efforts to rein in soaring food and property prices.
Gross domestic product in the world's second-largest economy expanded by 9.7 percent on year in the first three months of the year, the National Bureau of Statistics said beating Dow Jones Newswires' estimate of 9.5 percent.
The economy grew 9.8 percent in the final quarter of 2010 and 10.3 percent for the entire year.
"The national economy maintained steady and fast development and had a very good beginning (to the year)," NBS spokesman Sheng Laiyun said.
The politically sensitive consumer price index rose 5.4 percent year on year in March the fastest pace since July 2008 and well above the government's 2011 target of four percent and 5.0 percent in the first quarter.
Keeping inflation at 5.0 percent was "no easy job", said Sheng, as food prices soared 11 percent in the first quarter and housing costs rose 6.5 percent. Inflation hit 4.9 percent in February.
Sheng said China "must persist in managing inflation expectations" but noted prices fell 0.2 percent in March from February which was a "good sign".
But analysts said the government had more work to do.
"The Chinese economy is not slowing as planned or desired. Inflation remains stubbornly high," said Alistair Thornton, an analyst at IHS Global Insight.
Lu Ting, an economist at Bank of America-Merrill Lynch, said prices normally fell more than 0.2 percent following the Chinese New Year holiday.
"That's why policymakers are a bit nervous about inflation pressures and they raised (the) tone on inflation fighting this week," said Lu.
Premier Wen Jiabao vowed last weekend to ramp up efforts against rising costs, and an industry association on Wednesday ordered businesses not to raise prices and heed Beijing's call to stabilise costs to help tame inflation.
Top leaders, ever fearful of inflation's historical potential to trigger social unrest in the country of more than 1.3 billion people, have been struggling to rein in food and property costs.
Prices have remained high despite four interest rate hikes since October and tougher restrictions on bank lending.
The producer price index, which measures the cost of products at the factory gate, rose 7.3 percent year-on-year in March, up from 7.2 percent in February, the NBS said.
Global commodity prices have been rising in response to the disasters in Japan and the conflict in oil-rich Libya, fanning inflation and increasing pressure on China's millions of poor.
Sheng said investment in real estate development soared 34.1 percent on year to 884.6 billion yuan ($135.4 billion) in the first quarter. Other data released Thursday showed a bigger than expected rise in new loans last month.
Foreign exchange reserves soared past $3 trillion for the first time at the end of March. The world's largest stockpile has been rising as Beijing buys foreign currencies used to pay for the country's exports in order to control the value of the yuan.
Industrial output from China's millions of factories and workshops rose 14.4 percent year on year in the first quarter, while fixed asset investment, a measure of government spending on infrastructure, rose 25 percent.
Retail sales in the first three months of the year were up 16.3 percent.
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