Four interest rate rises in China and eight in India since the start of last year have failed to tame inflation in their fast-developing economies, alarming new data showed yesterday.
Consumer prices in China rose 5.4 per cent in March and 9.0 per cent in India, both faster than economists had been expecting, and raising fears of overheating. The prospect that monetary authorities in the two countries would have to dramatically step up the pace of rate rises weighed on financial markets for hours after the figures were released.
Chinese inflation was largely driven by a 12 per cent increase in food costs last month. Yi Gang, deputy governor of the People's Bank of China, declared last night that inflation was under control, and that the gradual appreciation of the yuan against the US dollar will counteract price pressures.
China's GDP increased by 9.7 per cent in the first quarter, more than expected.Reuse content