The National Statistics Institute (INE) has said that China's inflation rate hit 7.2 per cent in 2021. This is the highest since 2007 when it touched 7.8 per cent. In 2020, the inflation rate in the country was 2.97 per cent.
The inflation is also well above the Central Bank's target of 3 per cent. The Bank has been raising interest rates in recent months and is likely to continue to do so. In December 2021, the Consumer Price Index (CPI) rose 0.8 per cent as compared to the previous month.
While inflation affected everyone, it hit those who have fewer resources the hardest, said Economy Minister Lucas Palacios.
"That's why the 0.8 per cent rise in the CPI in December, well above market expectations (of 0.5 per cent), represents a double concern," said Palacios.
"Local and global factors explain this rise, but the former dominate. The increase in the exchange rate due to political and economic uncertainty, and the high liquidity due to withdrawals from pension funds, are the main factors explaining 2021's high inflation," Palacios added.