The area of southwest China's Sichuan province where the 8.0-magnitude quake struck on May 12 was not big enough to have any real impact on the national economy, Mu Hong, a senior planner, told a briefing in Beijing.

"Sichuan only accounts for four percent of China's overall gross domestic product," said Mu Hong, deputy director of the National Development and Reform Commission, the nation's top economic planning agency.

"The area severely impacted by the quake accounts for less than one percent. So the impact on the national economy will be there, but it will indeed be limited," he said.

The remarks came amid widespread speculation about the likely impact on the economy of the quake, which has cost more than 68,000 lives and is the worst natural disaster to hit China in a generation.

The atmosphere on the Chinese stock market Wednesday, prior to the briefing in Beijing, was influenced by uncertainty about the significance of the quake, traders said.

"Damage from the earthquake remains unclear with some estimating that it might amount to... three percent of gross domestic product," said Wu Dazhong, an analyst at Shenyin Wanguo Securities. "The uncertainty has had a psychological impact on the market."

Despite the concerns, stocks ended up 2.48 percent on Wednesday.

Officials at the briefing suggested the quake would not a leave a too severe mark on inflation either.

Shi Gang, another reform commission official, said the main concern would be if the quake caused a reduction in the summer harvest in Sichuan, in turn pushing up the consumer price index (CPI).

However, figures for grain production so far suggested this was not the case.

"Even though Sichuan is an important agricultural province for China, this year's summer harvest is likely to be pretty good. In Sichuan 92 percent of the wheat has been harvested," Shi said.

"So we expect this year's summer harvest will be rather good. From this point of view, the conditions for maintaining stable grain prices are favourable, and it's unlikely to create a major impact on CPI," he said.

China's economy, the world's fourth-largest, grew 10.6 percent in the first quarter from a year earlier after expanding by 11.4 percent in 2007, the fifth consecutive year of double-digit economic growth.

The annual growth of the consumer price index rebounded to 8.5 percent in April, after hitting a near 12-year high of 8.7 percent in February but weakening to 8.3 percent in March.

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