The People's Bank of China (PBOC),the nation's central bank, predicts that in the fourth quarter of 2004 the nation's economy will continue to develop "towards the anticipated direction" under the state's macro-economic control policies.

The central bank's third quarter report on monetary policies, published Tuesday, says that the speed of economic growth will continue to moderate, the growth rate of consumer price index will be stable and the national economy will maintain "steady growth."

According to the report, residents are optimistic about the prospects of the economy and expect higher incomes, which will support the increase of consumer spending. Various localities are still keen to expand their investment, and there is the possibility of a rebound in fixed asset investment. Meanwhile, the country's exports and imports will be basically balanced, and the total volume of foreign trade in the year will exceed a trillion US dollars for the first time.

It predicts that food prices will remain stable and that the growth rate of CPI in the fourth quarter is likely to moderate. However, the impact of food price hikes will last for some time, and the CPI for the whole year is predicted to be at around 4.1 percent. Residents are widely concerned about possible inflation. A recent investigation shows that 40.6 percent of residents believe that prices will hike in the fourth quarter, while only 6.7 percent predict a price drop.

Source: Xinhua