Economists forecast that the inflation figure for January, to be announced by the National Bureau of Statistics next Tuesday, may rebound to a new high fuelled by food prices, despite the frequent tightening measures implemented.

The bureau will release the Consumer Price Index and Producer Price Index according to a schedule on its website. The central bank will announce the amount of new yuan loans tomorrow. Other key economic data, including industrial production, fixed-asset investment and retail sales, for January and February will be reported in March.

"For the January data, market attention will center on the headline CPI and new loans to judge the inflation pressure,'' said Wang Qing, an economist at Morgan Stanley.

Wang expected the CPI, the main gauge of inflation, to climb 5.2 percent year on year in January to notch a new high. The CPI eased to 4.6 percent in December from November's 28-month high of 5.1 percent.

"Food inflation may have rebounded noticeably as the result of seasonal effect of Chinese New Year and bad weather," Wang said. The Ministry of Commerce said prices of 18 vegetables it tracked reported an annual growth of 12.6 percent during the week from January 17 to 23, up 6.5 percentage points from the previous week. Before the Spring Festival holiday, a traditional peak period for consumption, China suffered heavy snow in the east, icy rain in the south and drought in the central area, adding pressure to the already high inflationary pressure.

To tame prices, the People's Bank of China announced a rise in interest rates on Tuesday, the last day of the week-long Spring Festival holiday. It was the third interest rate hike since October, and from yesterday the key one-year lending rate rose by 25 basis points to 6.06 percent.

Wang forecast the government may raise rates three more times in the first half of this year together with multiple hikes in banks' reserve requirement ratio.

Lou Zhengwei, Industrial Bank Co's economist, said the PBOC will order banks to put aside more money as reserves five times in the first six months of this year, and he echoed Wang's view that rates will be raised three more times.

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