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Earthquake impact on economic core limited
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2008-06-04 08:46:00 |
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THE destructive earthquake in Sichuan Province won't change the fundamentals of China's economy while inflation remains the top priority for the government to tackle, said a central bank report yesterday.
The earthquake halted almost all industrial production in the quake-hit areas and caused heavy losses.
But since the combined industrial output of the 11 counties and cities devastated by the quake only accounted for 0.17 percent of the total national output and with no big mining resources in the areas, the quake's overall influence over the economy was limited, said the report.
The 8.0-magnitude earthquake also had a limited impact on food supplies. The areas produced 0.21 percent rice, 0.34 percent oil and 0.53 percent meat out of the national total.
The People's Bank of China report said there were so far no official statistics for direct losses caused by the earthquake. It anticipated reconstruction of the quake-hit areas will raise the growth of fixed-asset investment and add inflationary pressure there.
"The government has allocated 70 billion yuan (US$10 billion) for reconstruction, which may be increased if needed," said the report. "Meanwhile, the shortage of daily necessities in the areas can soften the pressure of rising consumer prices. But it will be temporary."(Shanghai Daily)
China's macro-economy has shifted from the brink of overheating to moderation. The nation's gross domestic product slowed to 10.6 percent in the first quarter from 11.9 percent last year.
China's macro-economic climate index has settled in the normal zone for four consecutive months through April. It was on the verge of overheating from September to December last year.
Some analysts predicted the consumer price index, the main gauge of inflation, will drop below 8 percent in May due to a bountiful rice harvest and stable food supply. But the report reiterated the task of taming inflation remained an arduous task.
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Chinese (ÖÐÎÄ°æ)
