China's soaring food prices keep inflation above 8 per cent

Beijing  -  China's monthly consumer price inflation remained above 8 per cent in March, driven by soaring food prices, the government said on Wednesday.

The consumer price index gained 8.3 per cent year-on-year last month, following an 11-year high of 8.7 per cent in February, the National Bureau of Statistics said.

Food prices soared 21.0 per cent, accounting for most of the consumer price inflation, while property prices and rents rose 6.6 per cent, the bureau said.

The new figures pushed inflation to 8.0 per cent for the first quarter of 2008, casting doubt over the government's ability to meet its target of holding annual inflation at 4.8 per cent.

The government has moved to control prices of grain, pork, cooking oil and other key commodities amid the rising inflation.

The bureau said China's estimated gross domestic product grew by 10.6 per cent from January to March, after growth of 11.2 per cent in the last quarter of 2007 and 11.9 per cent for the whole of last year.

The revised 2007 figure of 11.9 per cent, raised from 11.4 per cent, was announced last week following the government's latest adjustment to its calculation of estimated GDP.

Premier Wen Jiabao told China's annual parliament last month that rising prices were the "biggest concern" of the government.

"This has made the lives of people, particularly low income groups, more difficult," Wen said of the continuing inflation.

A recent report by economists from People's University in Beijing said slowing growth worldwide, the rise in the dollar against other currencies, and the effect of the US credit crunch on Chinese capital markets "will add more uncertainties to China's economic outlook this year".

The report forecast GDP growth of 10.5 per cent this year, while the World Bank has forecast slightly slower but "solid" economic growth of 9.6 per cent. (dpa)

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