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

CPI went up 1.5 percent year-on-year in 2006, slightly lower than the 1.8 percent a year earlier.

High gasoline price is a major cause of consumer price hike, said an official with the ministry's department of market operation regulation, which issued the forecast.

He said some goods may experience big price hikes in case of disasters and when demand far exceeds supply in the global market. If such situations occur, the consumer price might be even higher.

The People's Bank of China, or the central bank, said that the nation's grain price went up 9.1 percent in December last year compared with the same month of the previous year.

Retail sales in China is expected to jump around 13 percent year-on-year to 8.6 trillion yuan (1.1 trillion U.S. dollars) this year, according to the forecast.

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

Editor: Donald