BEIJING (AP) — China's gravity-defying economy still can surprise even its most bullish observers.Output grew at its fastest rate in 12 years during the three months ending in June, expanding by an eye-popping 11.9 percent over the year-earlier period and exceeding the most aggressive forecasts, according to government data reported yesterday.

"The GDP growth numbers caught just about everyone by surprise," said Stephen Green, a Standard Chartered economist.

The figures put China on track for a fifth straight year of double-digit growth and to overtake slower-growing Germany as the world's third-largest economy.

The government said it would take steps to control the boom but a spokesman gave no details.

Communist leaders want fast growth to reduce poverty but are trying to cool some industries, where they worry that runaway investment could push up inflation or ignite a debt crisis if borrowers default. They have raised interest rates four times since April 2006 and imposed investment curbs on some industries.

Inflation also rose, with consumer prices climbing by 4.4 percent in June. The economy also was under pressure from a swollen trade surplus and high energy consumption, the National Statistics Bureau said.

"We will further enhance and improve macro control and put into practice various policies set by the central government," Li Xiaochao, a statistics bureau spokesman, said at a news conference.

The government will take steps to "change the pattern of economic growth and deepen reform", Li said. But he gave no details of whether Beijing is planning a new rate hike or other measures.

Second-quarter growth was the fastest since the final quarter of 1995, when the economy expanded by 12.5 percent, according to economist Mingchun Sun at Lehman Bros. in Hong Kong.

"The key question is, how sustainable is all this? And the rhetoric in Beijing suggests the authorities think it is sustainable," Green said.

Analysts immediately raised their growth forecasts for the full year to as high as 11.5 percent, up from earlier estimates that ranged from 9.5 to 10.5 percent.

"The whole trajectory of growth has been raised," said Tim Condon, chief Asia economist for Dutch bank ING.

The rise in consumer prices, lifted by a 7.6 percent jump in food costs, is well above the official target of three percent.

Chinese leaders are worried about the political impact of rising food prices, which hit the poor, populous countryside especially hard.

Chinese stock markets showed little reaction to the new data, though trading was thin on expectations that economic tightening measures might be announced over the weekend.

The main Shanghai Composite slipped 2.1 points, or 0.05 percent, to 3,927.96. The key index in Shenzhen, the country's smaller second market, gained 3.11 points, or 0.3 percent, to 1,083.06.

Last week, Beijing increased its estimate of 2006 gross domestic product growth from 10.7 percent to 11.1 percent, bringing China closer to overtaking Germany as the world's third-biggest economy behind the United States and Japan.

Germany's 2006 output was about $2.9 trillion, with an annual growth rate of 2.5 percent. China's 2006 output was 21.1 trillion yuan ($2.705 trillion). Germany has yet to report its April-June growth figures.

Li, the statistics bureau spokesman, said he could not confirm projections that China might overtake Germany this year.

"One thing is for sure. The difference between the two countries in GDP aggregate is narrowing down," he said.

China's trade surplus in June was $26.9 billion, up more than 85 percent from the same month in 2006, according to government figures. That pushed the total surplus for the first half of the year to $112.5 billion.

The soaring trade gap has strained ties with Washington and challenged the Chinese central bank's ability to contain pressure for prices to rise as export revenues pour into the economy.

But government efforts to reduce reliance on exports by boosting Chinese consumer spending are starting to take effect, Li said.

Investment in factories and other fixed assets rose 25.9 percent in the first half, but that was down 3.9 percentage points from the same period last year, Li said.

Meanwhile, he said, consumer sales rose 15.4 percent, up 2.1 percentage points from the same period in 2006. Motor vehicle sales soared 36.7 percent.