China’s galloping economy slowed a tad in the first quarter, while inflation shot up despite the governments best efforts to keep the cost of living down.
The economy grew by 9.7 per cent in the first quarter, down from 9.8 percent in the fourth.
Consumer prices in March rose 5.4 per cent, the highest in nearly three years.
Beijing believes that keeping a tight rein on inflation is vital to keep the economy stable and has pushed up interest rates four times in order to try and bring it under control.
Sheng Laiyun from China’s Bureau of Statistics said: “The national economy maintained its steady and fast growth and had a good first quarter. There are price rises but they are not unbearable.”
Analysts believe that Beijing will continue to use interest rate rises to counter inflation.
Food price rises are as high as 11.7 percent from a year earlier, reflecting increases in demand and changes in the workforce as well as supply difficulties.
China now is in a battle to up its domestic consumption so as to rely less on exports and investments.