China’s consumer prices up slightly in March, as economists call for more stimulus measures to ramp up demand

China's consumer price index (CPI), the main gauge of inflation, rose by 0.1 percent in March year-on-year, dragged down by seasonal factors as consumer demand dropped after the Spring Festival holidays.

China's CPI rose by 0.1 percent in March year-on-year and declined 1 percent month-on-month, according to data from the National Bureau of Statistics (NBS) on Thursday.

Seasonal factors and ample market supply during the month were behind the drag, according to Dong Lijuan, a senior statistician with the NBS. Core CPI edged up 0.6 percent year-on-year, maintaining a moderate upward trend.

The reading highlighted the need for more stimulus measures to shore up overall demand, while an expected stronger economic recovery and pick-up in energy and raw material prices will lead to a moderate rise of CPI in the coming months, one economist said.

Foods prices were depressed by the ample supply of vegetables, pork, egg and fruits while prices for transportation and travel declined following the holiday season, contributing to the decline of overall CPI readings, Dong noted.

The March reading ended a sustained month-on-month rise in consumer prices from December to February.

China's producer price index (PPI), which measures the costs for goods at the factory gate, fell by 2.8 percent year-on-year in March, slightly down from a reading of 2.7 percent seen in February, data from NBS showed.

The depressed reading of CPI and PPI reflected an imbalance between supply and demand in the domestic market, Zhou Maohua, a macroeconomist at China Everbright Bank, told the Global Times on Thursday.

Looking forward, CPI is expected to recover as the government's expansionary fiscal policies will stimulate demand, and the prices for energy and raw materials regain foothold as companies restock their inventories, Zhou said.

Meanwhile, the PPI reading indicated a still imbalanced recovery in the industrial sector and highlighted the need for further policy support to bolster overall social demand, Zhou said.

Despite the depressed CPI figure, a range of recent government data showed that China's economic recovery has been picking up pace lately.

China's official manufacturing purchasing managers index (PMI), a main gauge of factory activity, stood at 50.8 in March, returning to expansion territory for the first time since September 2023. Also, China's exports have improved remarkably so far this year, with exports jumping by 10.3 percent in the first two months of 2024. Retail sales expanded 5.5 percent in the first two months.