China's consumer prices rise for second consecutive month, factory deflation continues

China's consumer prices saw a second consecutive monthly increase in March, while factory price deflation continued, indicating that the economy, though showing signs of improvement, still faces challenges.

The National Bureau of Statistics (NBS) revealed that the Consumer Price Index (CPI) rose by 0.1 per cent year-on-year in March, following a 0.7 per cent uptick in February.

This was the first gain in six months and surpassed the 0.4 per cent increase predicted by economists in a Reuters poll.

Add WION as a Preferred Source

However, the monthly comparison paints a less optimistic picture, as the CPI fell by 1.0 per cent from the previous month.

This cooling is sharper than the 1 per cent gain seen in February and worse than the 0.5 per cent decline forecasted by economists.

On the other hand, the Producer Price Index (PPI) continued its downward trend, falling by 2.8 per cent year-on-year in March, compared to a 2.7 per cent decline in the previous month.

Factory-gate prices have been on the decline for the past year and a half, with companies reducing selling prices to sustain sales amid falling commodity prices.

Although the government has made efforts to stimulate household spending, including relaxed car loan regulations, consumers remain wary of major purchases due to concerns about the weakening economy and the subdued job market.

The central bank of China has recently said that it would take measures to intensify efforts to strengthen domestic demand and enhance confidence in the economy.

Core inflation, which excludes volatile food and energy prices, stood at 0.6 per cent year-on-year in March, a deceleration from 1.2 per cent in February, further highlighting the subdued demand conditions in the country.

(With inputs from Reuters)