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China inflation has reached "turning point": Official

world Updated: Sep 15, 2011 10:34 IST

Reuters
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China's inflation has reached a "turning point" and is likely to fall steadily in the coming months due to the government's tightening campaign and favourable base effects, a top economic planner said in remarks published on Thursday.


Zhang Xiaoqiang, a vice head of the National Development and Reform Commission (NDRC), also said that the stabilising food prices and effective monetary policy had helped quench upward inflationary pressure.

"At least looking at data, the turning point has finally appeared. I think we can maintain prices at a basically stable level for the next stage," Zhang was quoted as saying in an interview during the World Economic Forum in Dalian.

The interview was later published on the commission's website (www.ndrc.gov.cn).

Annual inflation eased to 6.2% in August from a three-year high of 6.5% in July, although analysts expect it to remain elevated for several months.

Zhang said that annual inflation for 2011 would almost certainly exceed the government target of 4%.

He said that ultra-loose monetary policy in the West, especially the possible launch of a new round of quantitative easing by the United States, may fuel inflationary pressures in emerging economies, including China.

Turning to the outlook for the global economy, Zhang said that it could avoid a possible "double dip" as long as countries took concerted and effective measures.

He also said China was willing to buy bonds in countries hit by the sovereign debt crisis.

China is trying to use some of its $3.2 trillion foreign exchange reserves to help companies invest overseas, he said.