PBOC deputy governor: Inflation to drop to 3%

Central bank deputy governor Yi Gang said China’s inflation rate in 2009 would likely slow to 3% from this year’s 6.5%, Bloomberg reported. Lower inflation would give the government more room to implement changes to government-regulated prices in energy and public utilities. "When inflationary pressure comes down, it’s a good time to reform the prices. Prices should basically be determined by demand and supply. We will see steps and concrete measures in those areas to make prices quickly adjusted to be determined by the market," said Yi. Yi also said China’s current account surplus – the country’s trade surplus, interest and dividends, and foreign aid – could drop within three or four years to 4% of GDP, down from the current 10%.