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The recovery in the economy and in demand may translate into consumer price movements very quickly and “particular attention needs to be paid to the effect of changing expectations on future prices,” the People’s Bank of China (PBOC) said in its quarterly monetary policy report.
“During the stage of economic transition, the prevention of inflation risks should always be a highlight in financial macro-control,” the report said.
The remarks came after China’s inflation rate ticked up in the past few months as the country’s economy ended a seven-quarter slowdown and accelerated to a 7.9 per cent year-on-year growth in the fourth quarter of 2012.
The consumer price index (CPI), a gauge of inflation, grew 2.5 per cent year on year in December 2012, up from 2.0 per cent in November and 1.7 per cent in October.
The National Bureau of Statistics is expected to release the January CPI figure later this week.