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Rising vegetable prices are expected to cause China's consumer price index to climb, according to the National Bureau of Statistics.
The bureau said the consumer price index increased 0.3 percent in the first two months from a year earlier, and the increasing prices of vegetables in March would ensure that inflation would rise in the first quarter.
The CPI, which adds the cost of services and utilities to retail prices, is the broadest measure of inflation or deflation. The last time China's CPI rose was September 2001. It was unchanged in February 2002, compared with the year before. It fell from March 2002 until the end of last year.
"Seasonal adjustment in vegetable prices is the major reason behind the rise," said Chen Xinkang, chairman of the International Business School at Shanghai University of Finance and Economics. "Large demand usually boosts the prices during the Spring Festival."
In January and February, vegetable prices surged 27.3 percent from the same period last year, raising the CPI by 0.8 percentage point.
Meanwhile, retail sales increased about 9 percent in the first two months, mainly boosted by the automobile industry, which saw sales surge 140 percent year-on-year.
Lu Zhongyuan, an economist with the Develop-ment Research Center of the State Council, forecast that China's economy will grow by more than 9 percent in the first quarter - the fastest rate since 1997.
China is increasing its money supply to fight against prevailing deflation around the country.
(eastday.com April 14, 2003)
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