Nation's Consumer Inflation Falls In March

The nation's consumer inflation in March hit the slowest pace since September 2021, weighed by sluggish food prices, official data showed on Tuesday, suggesting demand weakness persists amid an uneven economic recovery.

Meanwhile, producer deflation sped up, extending price declines for a sixth straight month.

The consumer price index (CPI) for the month rose 0.7 percent year-on-year, compared with the one-percent gain seen in February, said the National Bureau of Statistics.

"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, economist at Guotai Junan International.

Food price inflation slowed to 2.4 percent year-on-year from 2.6 percent in the previous month. On a month-on-month basis, food prices fell 1.4 percent.

That pushed the CPI down 0.3 percent from a month earlier after a 0.5 percent fall in February, dashing expectations of no change.

The government has set a target for average consumer prices in 2023 to be about three percent. Prices rose two percent on year in 2022.

The producer price index, which measures the cost of goods leaving factories, shrank for the sixth consecutive month, with prices falling 2.5 percent – indicating lower margins for businesses.

Fresh fruit prices rose 11.5 percent year-on-year, and pork, the most consumed meat in the country, jumped 9.6 percent.

The cost of fuel for transport fell 6.4 percent. Globally, commodity and food prices are rising, though China has remained relatively unscathed by increases linked to the war in Ukraine.

Mainland policymakers have pledged to step up support for the economy, which recorded one of its worst performances in nearly half a century last year due to strict Covid-19 curbs.

China is targeting five percent economic growth this year, one of the lowest targets in decades, but Premier Li Qiang warned last month even this could be difficult to achieve. (Reuters/AFP)

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