China’s economy grows 9.7% and Inflation surges to 5.4%

China’s economy grew 9.7% in the first quarter of the year and inflation increased to 5.4% in March. The GDP growth rate and inflation both were more than expected. The increased inflation should add pressure on Chinese Government and force them to increase the rate further in order to cool down inflation. Further monetary tightening is necessary to control high inflation even if it affects the economic growth.

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