China s central bank said on Thursday that the country would continue to experience stable and sustainable growth in the second half, but warned that inflationary pressures continue to exist.
"The Chinese economy will grow steadily following its rapid recovery but we should not neglect upward inflationary risk, as loosened monetary conditions across the world have prompted international capital to look for (investment) outlets," the People s Bank of China (PBOC) said in its monetary policy report for the second quarter.
"Domestically, rising costs for labor and environmental protection as well as the ongoing reform of the resource pricing mechanism will all affect inflation," the report said.
However, the stable price of primary products in the international market, the country s current sufficient production capacity and the drop in money supply growth will provide opportunities for controlling the price level, it said.
China s Consumer Price Index (CPI), a major gauge of inflation, eased to 2.9 percent in June from the 3.1 percent a month ago on falling food prices and subdued non-food inflation. That has put the country s CPI for the first half at 2.6 percent year-on-year.
"We expect CPI to climb to above 3 percent in the coming months on the renewed pressure on food prices," said Wang Tao, chief China economist at the UBS Securities.
"The Chinese economy will grow steadily following its rapid recovery but we should not neglect upward inflationary risk, as loosened monetary conditions across the world have prompted international capital to look for (investment) outlets," the People s Bank of China (PBOC) said in its monetary policy report for the second quarter.
"Domestically, rising costs for labor and environmental protection as well as the ongoing reform of the resource pricing mechanism will all affect inflation," the report said.
However, the stable price of primary products in the international market, the country s current sufficient production capacity and the drop in money supply growth will provide opportunities for controlling the price level, it said.
China s Consumer Price Index (CPI), a major gauge of inflation, eased to 2.9 percent in June from the 3.1 percent a month ago on falling food prices and subdued non-food inflation. That has put the country s CPI for the first half at 2.6 percent year-on-year.
"We expect CPI to climb to above 3 percent in the coming months on the renewed pressure on food prices," said Wang Tao, chief China economist at the UBS Securities.
