Fighting the inflation is a key economic priority for China this year because the government aims to limit the risk of social unrest, Prime Minister Wen Jiabao in a speech to the country conditions.
“We can not afford the price increases to affect the normal life of people with low incomes,” said Wen in the report the annual meeting of The Chinese meeting of MPs in Beijing today. “This problem affects the welfare of the people has common interests and concerns social stability.”
The 64-year-old Wen confirmed targets 4 percent inflation for the whole year and 8% growth against attempts by the Communist Party to provide support for the 61-year rule. Over the past two weekends government sent hundreds of police in Beijing and Shanghai after the Internet calls for protests, inspired by bunks in the Middle East and North Africa.
“Inflation has the potential to trigger social unrest,” said Liu Li-Gang, an economist at Australia & New Zealand Banking Group in Hong Kong. The government should increase interest rates on loans and deposits by 0.75 percentage points by year’s end, and to raise wages and to grant aid the poor, he said.
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Greece began with sales of ten-year bonds yesterday after the country has announced plans to significantly cut costs in order to reduce the budget deficit. This government is seeking to win back investor confidence, which drew aside from the financial markets in the country. It is expected that the price of bonds to be such as to bring a serious return to investors, as it is projected to amount to approximately 6,5 per cent, Bloomberg reported before familiar with the situation requested anonymity. For comparison, the yield of the current issue, which is due in July 2019 proposes return of 6,1 per cent. Because of the planned auction price of the instruments, allowing investors to protect the bankruptcy of Greece have risen for the first time in a week. Swaps for bankruptcy protection today to deal with 11 basis points more expensive. Among the measures to combat the deficit were increases in excise duties on tobacco and alcohol restriction on wages in the public sector and others. The plan is the budget deficit, which currently amount to 12,7 percent, to be shrunk to about 4 per cent at the end of the year.
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