China’s first quarter economic growth, inflation beat expectations

China’s gross domestic product grew 9.7% in the first quarter while the consumer price index gained 5.4%, surpassing both expectations and growth in the previous year, Bloomberg reported. Economic growth slowed slightly from 9.8% in the fourth quarter of 2010, but was still above the median forecast of 9.4% given by economists surveyed by Bloomberg News. The same group forecast an increase of 5.2% in the consumer price index. China’s cabinet called taming inflation a top and “urgent” priority for the government in a meeting in Beijing this week. State media quoted a chief government economist on Wednesday as saying that China may raise interest rates twice more in the second quarter, in addition to the two increases in the interest rate and three increases in banks’ reserve requirement ratio already implemented this year. The country’s statistics bureau also announced that producer prices jumped 7.3%, while retail sales grew 17.4% in March. Fixed-asset investment excluding rural households rose 24% in the first quarter from a year earlier, while industrial production gained 14.8% in March.