(Xinhua)
Updated: 2008-04-04 09:17

BEIJING  -- The Industrial and Commercial Bank of China (ICBC) is forecasting an 8 percent increase in the country's Consumer Price Index (CPI) for the first quarter of 2008. The official government figures come out in mid-April.

The bank said in a report issued on Thursday that the CPI would hit 8.2 percent in March, slightly down from the previous month as the effects from the snow chaos that hit China earlier this year died away.

Inflation in China took its biggest jump in nearly 12 years in February when it rose 8.7 percent compared to the same period a year earlier. Food prices surged 23.3 percent while non-food prices edged up 1.6 percent from the year earlier period.

Inflation was mainly fueled by rising food and energy prices in the global market, and compounded by domestic factors that included increased costs and a strong demand, the report said.

The new round of global grain price rises, including rice and wheat, might add more pressure to the government's anti-inflation efforts.

However, the inflation index would start decelerating in the second half of 2008 as the government's macro controls took effect. The continued global slowdown also weighed on demand and could gradually pull down prices, the report said.

China rolled out a series of measures to fight inflation after the government was reshuffled last month. Among the latest moves was an increase in farm subsidies to boost production and curb grain price hikes.