China May inflation forecast at around 2.5%

BEIJING - China's Consumer Price Index (CPI) is likely to grow 2.5 percent in May from a year earlier, slightly up from the 2.4 percent recorded in April, the Bank of Communications (BOC) has forecast.

The official CPI for May is due to be released by the National Bureau of Statistics (NBS) on June 9.

The BOC expects the CPI, a main gauge of inflation, to rise at 2.5 percent for the second quarter year on year, and inflation to be mild throughout the year.

The outbreak of bird flu and the incident involving the dumping of dead pigs in a river in Shanghai have dampened people's appetite for pork, poultry and eggs, bringing their prices down in May, said Tang Jianwei, a senior analyst on macroeconomics at the bank.

Meanwhile, concern about an economic slowdown and the abundant vegetable supply in the market will help contain the upward pressure on inflation in the latter part of this year, said Tang.

China's CPI grew 2.4 percent year on year in April, up from 2.1 percent in March but well below the year's control target of 3.5 percent, according to the NBS.