China's inflation eased more-than-expected in March as demand decreased after the Lunar New Year holidays. Similarly, factory gate inflation weakened for the fifth consecutive month.

Consumer price inflation slowed to 2.1 percent in March from 2.9 percent in February, the National Bureau of Statistics reported Wednesday. The rate was expected to ease to 2.6 percent.

In the first quarter, consumer prices advanced 2.1 percent over the same period of last year. The government targets around 3 percent inflation for 2018.

Both food and non-food prices increased 2.1 percent each in March.

On a monthly basis, consumer prices declined 1.1 percent, partially offsetting the 1.2 percent increase seen in February.

Another report from NBS showed that producer price inflation slowed for the fifth straight month in March, to 3.1 percent from 3.7 percent a month ago.

Month-on-month, producer prices fell 0.2 percent, following a 0.1 percent drop in February. This was the second consecutive fall in prices.

Today's softer-than-expected inflation data are consistent with assessment that cooling price pressures will open the door to further monetary easing in the coming quarters, Julian Evans-Pritchard, an economist at Capital Economics, said.

Looking ahead, volatility in food prices aside, consumer price inflation will continue to edge down in the coming quarters and that producer price inflation could be back in negative territory by the end of the year, the economist said.

by P2PNews Staff Writer

editorial@p2pnews.com

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