BEIJING: China's annual consumer inflation will ease to about 3 percent in February, a senior pricing official said on Monday, which would be the slowest in almost two years.
"I predict we can see the inflation rate ease to below 4 percent, or may even hit around 3 percent in February. That will the lowest level in more than 20 months," Zhou Wangjun, vice head of the price department at the National Development and Reform Commission, said on a webcast.
"The decline would mainly result from a higher base effect," he added.
China's inflation rebounded to 4.5 percent in January as spending jumped during the Chinese Lunar New Year holiday season, breaking a five-month softening trend and forcing a market rethink of policy easing expectations.
Annual consumer inflation was last below 4 percent in September 2010, and had since accelerated steadily to reach a three-year-high of 6.5 percent in July 2011.
Inflation may stabilise somewhat after February and the full-year rate is likely to show a "significant decline" from last year's 5.4 percent, but uncertainties linger, Zhou said.
"We cannot be too optimistic," he said, adding that uncertainties, including global oil prices due to geopolitical risks in the Middle East, weather conditions and China's own further pricing reform of natural resources, still prevail.
"The tone set by the central government for this year is to prevent inflation from rebounding," Zhou said.
China's Lunar New Year holiday has distorted economic indicators for January and economists warned against reading too much into the higher-than-expected inflation and lower-than-expected loan and trade data.
Chinese central bank has so far opted for a much flexible way of injecting cash to support the slowing real economy via open market operations, rather than a much-awaited cut in banks' required reserves.
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