CHINA’S consumer price index (CPI), a measure of inflation, increased 8.3 percent in March, down from February’s 8.7 percent, the highest rate in nearly 12 years, according to the National Bureau of Statistics (NBS) yesterday.

Li Xiaochao, spokesperson for the NBS, said the CPI for the first quarter of this year was 8 percent, an increase of 2.7 percent from a year earlier. Urban CPI rose 7.8 percent year-on-year while rural CPI rose 8.7 percent in the first three months.

Food prices soared 21 percent, driving up CPI by 6.8 percentage points. Housing prices and rents went up 6.6 percent on average, driving up the inflation gauge by one percentage point.

The first quarter also saw retail prices up 7.4 percent, 5.3 percentage points higher than last year, and producer price index, or PPI, went up 6.9 percent, four percentage points higher.

Premier Wen Jiabao has said taming inflation is the government’s top priority. He has promised to ease shortages of meat, grain, oil and other basic goods that are blamed for the sharp price rises.

Economic growth in the January-March quarter was 10.6 percent compared with 11.7 percent in the same period last year, according to the bureau. That was down from the 11.2 percent rate reported for the previous quarter.

China’s economy grew by 11.9 percent last year, but analysts expect this year’s expansion to slow to as low as 9 percent.

The People’s Bank of China yesterday announced it was raising reserve requirement ratio by 0.5 percentage points to a record high of 16 percent, in the latest effort to curb a boom in lending and ease inflation.

The new rate will come into effect April 25. The central bank had raised banks’ reserve requirement ratio 10 times in 2007 and has already hiked it twice in 2008.(SD-Xinhua)