CHINA'S inflation is to peak in 2009 and then fall, according to the Industrial and Commercial Bank of China in a report yesterday.
The report by China's largest lender said the prices of assets would gradually rise in the next three years. However, the bank predicted the nation's stock markets will continue to suffer significant uncertainties and will see wild fluctuations during 2010 and 2011. But stock prices are set to rise after that, it said.
During the 2009-2011 period, liquidity would remain abundant with the M2 supply rising rather rapidly, but the possibilities of temporary liquidity shortfalls would increase, said the report.
The report predicted there would be little probability of drastic economic fluctuations in the next three years as the economy would be backed up by increasing domestic demand, positive macro controls and overseas conditions.
The major task of China's economic control is to curb inflation and reduce risks of serious economic fluctuations, said the report.
Inflation jumped in mid-2007 on shortages of pork, grain and other food items.
Consumer prices rose 7.7 percent in May over the same month last year. That was a slight fall from April's 8.5 percent rate but above the target of 4.8 percent for this year. Inflation in February hit a 12-year high of 8.7 percent.