China CPI to rise 7.2% in 2008

China's consumer price index is expected to rise 7.2 percent year on year in 2008. That's according to a report released by Bank of China this week. The bank had predicted in an earlier report that CPI would increase 6.8 percent this year. It attributed the revision to the rising prices of gasoline, coal oil and electricity.

China's consumer price index is expected to rise 7.2 percent year on year in 2008.

China has seen inflation pressure this year, with CPI growth near its 12-year high of 8.7 percent in February. The report suggested the central government adopt more tightening monetary policies to further drain liquidity and curb excessive investment.

It also advised raising interest rates and reining in the appreciation of the yuan,saying a slower appreciation rate will help make full use of the domestic labor force. The report predicts that China will very likely raise interest rates in the fourth quarter.

China has seen inflation pressure this year, with CPI growth near its 12-year high of 8.7 percent in February.