Persistently high global prices for commodities and other goods are fuelling consumer inflation in China and may put Beijing's full-year inflation target out of reach, the country's top economic planner said on Monday. The National Development and Reform Commission said the root cause of high commodity prices was developed countries' loose monetary policies, which it said have led to imported inflation in the world's second-largest economy.
"The loose global liquidity condition is unlikely to change in the short term and the global commodity prices are still high, so the impact from imported inflation has not eased," the agency said in a statement on its website: www.ndrc.gov.cn. The increase of other input costs for enterprises, such as raw materials and other resources, as well as the impact of some natural disasters, could also raise inflationary expectations, it added.
Beijing has set an annual inflation ceiling at 4 percent this year, but prices keep rising stubbornly and many economists have said it will be tough to achieve that goal. Although Beijing does not see inflation getting out of hand, it remains elevated, hitting a three-year high of 6.5 percent in July.
The government has taken a slew of measures, including repeated rises in banks' required reserves and interest rates, in a bid to put a lid on price rises. The agency also warned that the debt crisis in the eurozone is "deteriorating and spreading", which could add more uncertainties to the world economic recovery. Political unrest in the Middle East and the Standard & Poor's downgrade of US credit rating have also hit the international financial markets and may have a negative impact on the global economy, it said.