Chinese inflation rises but PPI continues to drop

|By:, SA News Editor

China's CPI accelerated to +2.4% on year in March from +2% in February but came in below consensus of +2.5%

On month, China's CPI fell 0.5%, as expected, vs +0.5% in February.

Food prices rose 4.1% as the cost of fruit and vegetables jumped, although non-food inflation was +1.5%.

"Inflation remains very low in China and growth is still the concern," says economist Xu Gao. "The pressure on the central bank to loosen monetary policy will grow."

Meanwhile, factory-gate prices (PPI) dropped for the 25th consecutive month, falling 2.3% on year vs -2% previously and forecasts of -2.2%.

"The lingering deflation trend in the PPI seems more worrying," says JPMorgan economist Haibin Zhu, "as it reflects structural overcapacity in a number of sectors as well as the cyclical downturn in the industrial sector."

The Shanghai Composite is +0.05%. (PR)