China’s consumer and producer prices tick up in March

Beijing has struggled to get prices to pick up in recent months, with both measures staying stubbornly low as the global growth cools leading to weak demand while the US trade war drags on.

But on Thursday data showed the consumer price index (CPI) — a key measure of retail inflation — rose 2.3 percent on-year last month, sharply up from 1.5 percent in February.

The gain came on the back of a jump in the price of meat including beef and lamb, with pork also soaring owing to an outbreak of African swine flu in China that has led to the culling of a million pigs. Fresh fruit and vegetable prices also jumped.

The producer price index (PPI) — an important barometer of domestic demand — climbed 0.4 percent, from a 0.1 percent in February and snapping seven months of falling.

The CPI and PPI readings were in line with forecasts in a Bloomberg survey but economists remain sceptical about the outlook.

There is “no turnaround in underlying inflation yet”, said Julian Evans-Pritchard of Capital Economics.

“Higher food and oil prices pushed up headline inflation last month but broader price pressures remain subdued,” said Evans-Pritchard, attributing the rise in factory gate prices to rising raw material costs such as oil.

Growth in China dropped to 6.6 percent last year, its lowest almost three decades and the government last month said it was aiming for expansion of between six and 6.5 percent in 2019.

“Continued economic weakness is likely to keep a lid on broader price pressures,” said Evans-Pritchard.

— Bloomberg News contributed to this story —