BEIJING (Reuters) - China's consumer price inflation will hover above 3 percent in the final quarter of this year, driven by global excess liquidity and a spike in agricultural prices, a senior government economist said in remarks published on Monday.
Fan Jianping, chief economist with State Information Center, a think tank under the powerful National Development and Reform Commission, also said that interest rate increases would not help to curb inflation, although they could possibly help contain asset price bubbles.
"Global agricultural prices will continue to climb up for a while under the U.S. quantitative easing policy," Fan said. "Agricultural prices will have monetary foundation to stabilize only when the global money supply returns to neutral."
A surge in hot money inflows, combined with domestic speculative money, will drive up Chinese agricultural prices, he told the official China Securities Journal.
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