Economists: March inflation dip may be temporary

Macroeconomics

16 April 2008

Economists are expecting the authorities to keep tight monetary policies in place despite an expected slowing down of inflation in March, state media reported. In a recent research note, Deutsche Bank economist Jun Ma projected China's consumer price index (CPI) for March at 8.2%, down from the 11-year high of 8.7% recorded in February, but cautioned that this did not necessarily mean the end of China's inflation worries. Ma attributed the March slowdown to recovering vegetable production following harsh winter storms in February, as well as increases in the supply of meat products and improved transportation. He said recent approvals of price increases for milk and edible oil would begin to be reflected in the CPI in future months. Meanwhile, Central bank Deputy Governor Liu Shiyu said the March inflation would fall to 8.3% for "seasonal reasons."

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