BEIJING (Reuters) – China’s consumer prices in March rose for a second straight month while producer price deflation persisted, pointing to still weak demand despite signs that the struggling economy is regaining some momentum.
Worrying deflationary pressures in the world’s second-largest economy appear to be slowly easing, though demand remains soft and a protracted property crisis is still weighing heavily on consumer and business confidence.
Persistent declines in factory-gate prices and export prices, meanwhile, have added to tensions with China’s biggest trading partners.
The consumer price index (CPI) grew 0.1% in March from a year earlier, against a 0.7% rise in February, which was the first gain in six months, data from the National Bureau of Statistics (NBS) showed on Thursday. That compared with a 0.4% increase predicted by economists in a Reuters poll.
The CPI fell 1.0% month-on-month, cooling from a 1% gain in February and worse than a 0.5% drop forecast by economists.
The producer price index (PPI) fell 2.8% in March from a year earlier, widening a 2.7% slide the previous month, and compared with a forecast 2.8% fall. Factory-gate prices have been falling for a year and a half as companies cut selling prices to maintain sales and as commodity prices fell.
On a month-on-month basis, the PPI fell 0.1%.
In recent months China has rolled out a raft of incentives to spur household spending including easier car loan rules, but consumers remain cautious about big-ticket purchases amid worries about the sputtering economy and the weak job market.
Earlier this month, China’s central bank vowed to strengthen efforts to expand domestic demand and boost confidence.
Core inflation, excluding volatile food and energy prices, in March was at 0.6% from a year earlier, slower than 1.2% in February.
(Reporting by Qiaoyi Li and Joe Cash; Editing by Jacqueline Wong)
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