The recent earthquake will add to China's inflationary pressure as the country is battling to contain rising prices, but the effect will be temporary, said a central bank research report released Tuesday
The recent earthquake will add to China's inflationary pressure as the country is battling to contain rising prices, but the effect will be temporary, said a central bank research report released Tuesday.
Meanwhile, the Chinese economy will not suffer a "hard landing" as feared by some economists, making it unnecessary to relax the current tight monetary policy, according to the report compiled by the research unit of the People's Bank of China.
The May 12 earthquake that hit Sichuan and its neighboring regions has killed nearly 70,000 and caused massive damage, but it would not derail the general trend of the economy toward more stable growth, according to the report.
China's roaring economy is beginning to stabilize, although surging demand for some commodities following last month's disastrous earthquake will add to inflationary pressures, the research report said.
It noted that the value of economic output in the region affected by the disaster is only 0.25 percent of the national total.
The damage to the industrial and agricultural production in the earthquake-hit areas, as well as the demand for food and daily necessities from this region will put new pressure on consumer price.
But the report, which cites examples of Japan following major earthquakes, said that the impact of earthquakes on the consumer price index will only be felt in the short term, and there will not be any significant influence in the long run.
But reconstruction is fueling higher demand for cement, steel and other materials and will likely add to inflationary pressures, it said.
