Increased food prices drove China's inflation at retail level to rise at a faster pace in Marchthan the previous month, but the inflation pressure still remained subdued and gavepolicymakers enough room to mull economic policy action.
INFLATION TAME
China's consumer price index (CPI), a main gauge of inflation, increased 2.4 percent yearon year in March, up from 2 percent in the February, official data showed on Friday.
The acceleration in inflation was mainly attributed to faster growth of food prices, said YuQiumei, a senior statistician with the National Bureau of Statistics (NBS).
Food prices account for nearly one-third of the weighting in the calculation of China's CPI.They gained 4.1 percent from a year earlier and contributed 1.35 percentage points toMarch's CPI growth, according to NBS figures.
Prices of fruit, aquatic products, vegetables and grain went up year on year in March, withfruit prices surging 17.3 percent and those of vegetables jumping 12.9 percent.
Tang Jianwei, a researcher at the Bank of Communications, attributed the continuedmonthly CPI growth partly to the so-called carryover effect, as the prices a year earlierremained at a relatively low level.
Bucking the trend, prices of poultry and meat declined in March year on year, with theprice of pork, China's staple meat, down 6.7 percent.
Prices of non-food products and services edged up 1.5 percent in March from a year ago,boosted by prices of utilities including electricity and gas, tours and outings, and rent.
However, China's CPI declined 0.5 percent in March from February mainly due to a foodprice drop, as Chinese people traditionally have bigger demand for vegetables, meat andfruit during the Spring Festival, which started at the end of January and lasted throughearly February this year.
Tang estimated a full-year CPI growth hovering at 2.6 percent in 2014, as the country'seconomic growth will continue the moderate pace amid the weak demand both at homeand abroad.
The latest NBS data also revealed that China's producer price index (PPI) contracted 2.3percent year on year in March, following a 2-percent decline in February.
The PPI, which measures inflation at wholesale level, has been in deflationary territory for25 consecutive months, the longest drop since the 1990s.
The PPI contraction showed that demand for industrial products remained weak, and arisk of deflation was likely to emerge, Liu Ligang, chief China economist at the ANZBanking Group, said in a research note.
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