2011-05-26 14:26

The Organization for Economic Cooperation and Development (OECD) has predicted that China's tightening monetary policy will keep working to pull CPI to the controlling target of 4 percent, the China Business News (CBN) reported Thursday.

The Paris-based organization expects China's inflation to grow at the beginning of this year. It predicts that China's consumer price index (CPI), a main gauge of inflation, will hit 4.6 percent in 2011 and 3.4 percent in 2012, according to the report.

The inflation pressure will be eased as China allows yuan's effective exchange rate to appreciate against the dollar, according to the 2011 Economic Outlook issued by OECD. China's financial policies will still be people-oriented to increase social spending and improve residents' after-tax income, it says.

The OECD report also says China's economic growth is on track to hit nine percent annually in the next two years, the newspaper reported.

As export growth slows and the prices of imported goods rise, the proportion of China's current account surplus to GDP in 2011 will decrease from 10 percent in 2007 to 4.5 percent, the report said.