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Beijing - China said on Friday its economy grew at a robust but slightly slower pace in the first quarter of 2011 while inflation accelerated despite efforts to rein in soaring food and property prices.
Gross domestic product in the world's second-largest economy expanded by 9.7% on year in the first three months of the year, the National Bureau of Statistics said -- beating Dow Jones Newswires' estimate of 9.5%.
The economy grew 9.8% in the final quarter of 2010 and 10.3% for the entire year.
"The national economy maintained steady and fast development and had a very good beginning (to the year)," NBS spokesperson Sheng Laiyun said.
The politically sensitive consumer price index rose 5.4% year-on-year in March the fastest pace since July 2008 and well above the government's 2011 target of four percent - and 5.0% in the first quarter.
Keeping inflation at 5.0% was "no easy job", said Sheng, as food prices soared 11% in the first quarter and housing costs rose 6.5%. Inflation hit 4.9% in February.
Sheng said China "must persist in managing inflation expectations" but noted prices fell 0.2% in March from February which was a "good sign".
But analysts said the government had more work to do.
"The Chinese economy is not slowing as planned or desired. Inflation remains stubbornly high," said Alistair Thornton, an analyst at IHS Global Insight.
Lu Ting, an economist at Bank of America-Merrill Lynch, said prices normally fell more than 0.2 percent following the Chinese New Year holiday.
"That's why policymakers are a bit nervous about inflation pressures and they raised (the) tone on inflation fighting this week," said Lu.
Premier Wen Jiabao vowed last weekend to ramp up efforts against rising costs, and an industry association on Wednesday ordered businesses not to raise prices and heed Beijing's call to stabilise costs to help tame inflation.
Top leaders, ever fearful of inflation's historical potential to trigger social unrest in the country of more than 1.3 billion people, have been struggling to rein in food and property costs.
Prices have remained high despite four interest rate hikes since October and tougher restrictions on bank lending.
Global commodity prices have been rising in response to the disasters in Japan and the conflict in oil-rich Libya, fanning inflation and increasing pressure on China's millions of poor.Sheng said investment in real estate development soared 34.1% on year in the first quarter. Other data released Thursday showed a bigger than expected rise in new loans last month.
Foreign exchange reserves soared past $3 trillion for the first time at the end of March. The world's largest stockpile has been rising as Beijing buys foreign currencies used to pay for the country's exports in order to control the value of the yuan.
