China's central bank signaled that it would pay special attention to inflation, as it sees rising risks to domestic prices from global liquidity and labor shortage.
In its fourth-quarter monetary policy report, the People's Bank of China on Wednesday warned of imported price inflationary pressure.
The bank said commodity prices will be pushed up by surging capital inflows. Moreover, cost of products and services will rise on easing labor-supply growth.
An economic recovery together with demand growth will raise consumer prices in a faster manner, the bank noted.
The central bank vowed to curb speculative housing demand, while providing reasonable market liquidity and credit. It repeated the exchange rate reforms and the use of yuan in cross-boarder trade and investment.
Further, the bank observed "relatively strong" momentum in economic growth, but reiterated to maintain a "prudent" monetary policy and stable monetary conditions.
According to official figures, the economy expanded 7.9 percent in the fourth quarter, ending seven-quarters of slowdown. However, the economy grew 7.8 percent in whole year of 2012, the weakest pace in 13 years.
Despite slower growth, the central bank has held off further monetary easing since July last year due to inflation concerns.
China's external trade and inflation figures are due on February 8. Exports are forecast to grow at a faster pace of 17.3 percent in January, following a 14.1 percent rise in December.
Annual inflation is expected to ease sharply to 2 percent in January from 2.5 percent a month ago. In December, freezing weather and approaching Lunar New Year had pushed up food costs, which in turn lifted inflation to a seven-month high.
The inflation rate for the 2012 was 2.6 percent, well below the government's target of 4 percent.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.