China's consumer inflation hit an 18-month low and factory-gate price declines sped up in March as demand stayed persistently weak, shoring up the case for policymakers to take more steps to support the uneven economic recovery, Liangping Gao and Ryan Woo reported for Reuters.
Photo Insert: In contrast to surging prices globally, China's retail and producer inflation has remained anemic as the consumer and industrial sectors struggle to recover from their pandemic hit.
In contrast to surging prices globally, China's retail and producer inflation has remained anemic as the consumer and industrial sectors struggle to recover from their pandemic hit.
Analysts now think consumer inflation could fall short of Beijing's official targets this year.
The consumer price index (CPI) rose 0.7% year-on-year, the slowest pace since September 2021 and weaker than the 1.0% gain in February, the National Bureau of Statistics (NBS) said on Tuesday.
The result fell short of the 1.0% rise tipped in a Reuters poll.
"China's March inflation report suggests that the Chinese economy is running a disinflation process, which points to bigger room for monetary policy easing to boost demand," said Zhou Hao, an economist at Guotai Junan International.
The producer price index (PPI) fell 2.5% year-on-year, the fastest pace since June 2020 and compared with a 1.4% drop in February. The PPI has fallen for six straight months.
China's yuan hit a more-than-one-week low against the dollar on Tuesday morning following the data, as investors stepped up bets domestic interest rates could be cut. Shanghai's benchmark stock index fell 0.25%, reversing a slight uptick in the opening.