China's consumer prices are expected to rise around three percent in 2004 but there is little danger of high inflation, a top government economist was quoted on Monday as saying.
"The country's inflation rate will stay at a healthy level and unlikely reach five percent as some international analysts forecast," the Xinhua news agency quoted Yao Jingyuan, chief economist of the State Statistical Bureau, as saying.
China was unlikely to see a steep rise in inflation as its economy was closely linked with the rest of the world, which was still experiencing deflationary pressures, Yao said.
The consumer price index, China's benchmark inflation indicator, rose 3.2 percent in the 12 months to January, driven by soaring food prices and strong demand for raw materials.
The CPI rose 1.2 percent in 2003 from the previous year.
Premier Wen Jiabao this month ordered a curb on loans to some red-hot sectors and the central bank has said it aims to cut new lending by 13 percent this year, indicating persistent worries that over-investment may fuel bubbles in sectors such as steel and property.
Economists have said China's central bank might raise yuan interest rates to help cool economic growth if inflation climbs further, but some fear a rate hike could fuel capital inflows and put more upward pressure on the yuan currency.
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