China`s consumer inflation stable at 2.3% in March

China`s consumer price inflation rose less than expected in March, flattening out after a four-month strengthening trend, but wholesale prices remained stubbornly in deflation, Reuters reported.

Consumer prices in March rose 2.3%, below a median forecast of 2.5% in a Reuters poll but equal to February`s increase of 2.3%, according to Reuters.

Although the prior month`s figure represented the fastest rise in more than a year, the increase was driven largely by sharp gains in food prices following an unexpectedly harsh winter, according to the report.

Economists have been watching closely to see how inflation evolves in China this year following a prolonged easing campaign by the central bank beginning in late 2014, which has boosted credit, but has yet to result in substantial price increases.

Producer prices fell 4.3% in March, extending their decline to a full four years, but at a slower rate than forecasts of a 4.6% decline. Falling commodity prices and overcapacity in key industrial sectors have helped mire producer prices in a lengthy slump, although declines have eased in recent months, Reuters writes.

A key factor supporting consumer prices, which have trended sideways around 1.5% year-on-year since late 2014, has been the relative strength of the labour market, according to the report.

China grew at its slowest pace in more than two decades in 2015, as the economy struggled with an extended correction in the real estate market, weak global demand and high corporate debt levels.

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