Reply #90: Inflation "set to increase further"

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http://news.xinhuanet.com/english2010/china/2011-05/12/c_13871020.htm

BEIJING, May 12 (Xinhuanet) -- Inflation may rise further after it hit 5.3 percent year-on-year in April, economists said, but policymakers should not increase interest rates, at least in the short term, if they want to avoid a "hard-landing".

The Consumer Price Index (CPI), a key gauge of inflation, was 0.1 percentage points lower than the 32-month high of 5.4 percent in March, but it is still significantly higher than the government's 4 percent target for this year, the National Bureau of Statistics (NBS) said on Wednesday.

"The decline indicates that the government's previous measures to tame inflation have taken effect," Sheng Laiyun, spokesman for the NBS, said at a news conference.

However, soaring raw material prices and excessive liquidity in global markets may continue to increase inflationary pressure in the short term, Sheng said.