China raises 2008 inflation target to 4.8 percent: report

BEIJING, Feb 27, 2008 (AFP) – China has raised its inflation target for 2008 to 4.8 percent due to steeper-than-expected price rises last year and the impact of the worst winter in 50 years, state media said Wednesday. Inflation is a key concern for the political leadership, and the central bank has warned it may raise interest rates further — on top of six rate hikes last year — to keep it in check. The government had aimed to control inflation this year at the 2007 level and in December set the target at 4.6 percent, equivalent to the figure for the first 11 months of the year, the 21st Century Business Herald reported.

But it now feels forced to lift the target as inflation spiked at the end of 2007 and further surged to an 11-year high of 7.1 percent in January after the worst winter weather in five decades hit China late in the month, it said.

The new target is expected to be officially announced at the National People’s Congress, the nation’s parliament, which will open next week.

However, even before the new target has been officially announced, forecasts have started to appear suggesting that it, too, may be hard to achieve.

State Information Centre, a key government think tank, has predict