China's consumer price index (CPI) is expected to climb 2.5 percent in 2007, according to Ministry of Commerce forecasts.

CPI went up 1.5 percent year-on-year in 2006, slightly down on 1.8 percent growth a year earlier.

High gasoline price is a principal reason for consumer price hikes, said an official with the ministry's department of market operation regulation, which issued the forecast.

He said some goods would experience big price hikes in two instances, in case of disasters and when a global market scenario sees demand far exceed supply.

The People's Bank of China, or the central bank, announced that the nation's grain price shot up 9.1 percent in December last year compared with December 2005.

Retail sales in China should rise around 13 percent year-on-year to 8.6 trillion yuan (US$1.1 trillion) this year, according to the forecast.

The rising incomes of urban residents and increasing use of cars will fuel spending on health care, tourism, recreation, cosmetics, gifts and jewelry, it says.

(Xinhua News Agency January 31, 2007)