2010 CPI to reach 2.9%, mild inflation to stay
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China's consumer price index, a main indicator of inflation, may increase 2.9 percent in 2010, said Li Daokui, a professor at Tsinghua University and an economic advisor to the central bank, at the World Economic Forum's Annual Meeting of the New Champions in Tianjin.
His estimation is in line with the assessments by the National Development and Reform Commission, which measures China's CPI. Zhang Xiaoqing, vice minister of the NDRC, said Tuesday that China's consumer inflation will stay within the government's 3-percent target for this year.
But, Li said, the CPI may rise to 3.7 percent in September, surpassing the 22-month record set just last month, when it reached 3.5 percent.
Li said the rise in commodity prices resulted from an increase in labor costs, agricultural production costs and international raw material prices. Because those costs will unlikely fall anytime soon, China will see a mild inflation over the next three to five years, or even longer, Li said.
He suggested that the government raise the benchmark deposit rate to help people feel more secure about putting their money in the banks.
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