At 3.8% China's April CPI higher than it forecasted

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AP , SHANGHAI
Saturday, May 15, 2004,Page 12

Consumer prices rose 3.8 percent last month over a year earlier, the government reported yesterday, as it issued an order to banks to curb lending that is fueling inflation.

The jump in the consumer price index, China's main barometer of inflation, exceeded analysts' forecasts and was well above the 3.2 percent seven-year high set in February. Consumer prices rose 3 percent in March.

The government's target for inflation this year is 3 percent.

Officials worry that China's surging economic growth could ignite inflation and lead to financial problems. They have tried to shrink bank lending and are discouraging new investment in such industries as steel where they fear dangerous overcapacity.

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