China Inflation Rises in March

Bigger-than-expected increase may limit policy makers’ use of economic stimulus.

China’s inflation accelerated more than forecast in March on a pickup in food prices, signaling that policy makers may exercise caution in adding stimulus to boost growth.

Consumer prices rose 3.6 percent from a year earlier, the National Bureau of Statistics said today. That was more than the median 3.4 percent estimate in a Bloomberg News survey of 33 economists. Food-related costs gained 7.5 percent.

Vegetable Costs

Today’s report showed vegetable prices surged 20.5 percent in March from a year earlier after a 6.5 percent increase in February, while meat and egg prices climbed 11.3 percent last month. The acceleration is “most likely temporary” and the result of bad weather in a couple of vegetable-planting provinces, said Ren Xianfang, a Beijing-based economist with IHS Global Insight.

Reserve-Ratio Cut

The People’s Bank of China cut lenders’ reserve requirements effective Feb. 24 for the second time in three months to pump more liquidity into the banking system.

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