Thematic team of the People's Bank of China Research Bureau today released "the analysis of current price situation and the future trend" report. The report predicts that in 2007 China's consumer prices will continue to maintain 2006’s growth momentum, the growth of investment and export will drop slightly, but both will still maintain a rapid growth, the excessive growth of the trade surplus is expected to be eased. The report predicts that GDP growth will be 10.0% in this year, the CPI will be around 2.3%. According to the report, consumer price index (CPI) in January and February will increase over the same period last year, tail-raising factor of price larger than the new price-increasing factor; The growth of price Indices of Industrial Products (PPI) and the purchasing price of raw materials and burning dynamic dropped than the same period last year, but prices of black metal increased; The price trend of production materials in the circulation was overall stable; The land prices increased.

The report analyze that the CPI increase is mainly due to the increase of food price which drove by the increase of grain and oil price, in which, the contribution rate of the price of poultry and it’s products to the increase of CPI reached 45.8%. The main reasons of the decline of PPI as following: The growth rate of domestic investment declined, and the prices of international crude oil and non-ferrous metal fall.

Report think that the factor which impact the increase of future price level is the expected of price increase of the residents still high, the likely to rebound price in international crude oil and non-ferrous metals, the pressure of slight increase in grain prices, the price reform of resource-type products, the increase of Land price and enterprise labor, safety, environmental protection costs. The faster growth of consumer and the upgrading of structure have a certain role to promote the increase of CPI. The factor which affects future price level downward is the drop in the growth rate of investment, the adjustment of export tax rebate policy and production overcapacity of some consumer goods, capital goods.