(Yicai Global) April 11 -- China’s consumer price index climbed less than expected by rising less than one percent for the first time in the past 12 months in March while producer prices fell the most since June 2020 amid low inflation exceptions for this year.

The CPI rose by 0.7 percent from a year ago, lower than the 0.9 percent prediction given by chief economists polled by Yicai Global. The clip of rising slowed by 0.3 percentage points from February, according to data provided by the National Bureau of Statistics today.

The core CPI, which excludes food and energy prices, edged up by 0.7 percent, accelerating the pace of growth from 0.6 percent in February. Food prices rose slower at 2.4 percent from a month earlier. Non-food prices climbed by 0.3 percent while prices of flight tickets, accommodation, transportation, and tourism surged by more than that.

The reason behind the weakening inflationary pressures of consumer prices is the falling prices of vegetables and refined oils after the 2023 Spring Festival, according to Golden Credit Rating International.

The mild increase to the CPI and core CPI means that China has an abundant supply of goods, services, and major consumer products, Bruce Pang, chief economist at Jones Lang LaSalle's China arm, said to Yicai Global.

The non-food CPI and core CPI are expected to stay low by December and limited inflationary pressures will not disrupt macro policies, Pang said. The government should stimulate domestic demand via high-quality supply while prioritizing consumption, Pang added.

The producer price index declined by 2.5 percent in March from a year ago, the biggest decrease in almost three years, partly due to the high baseline of last year when prices of petroleum, coal, and steel surged due to the Russia-Ukraine conflict. The PPI slump was 1.1 percentage points larger than a month earlier.

The PPI is likely to remain low for some time as the growth of major economies is slowing and global trade is weak, Pang said, adding that China’s consumption and investment in real estate are still recovering slowly.

Editor: Emmi Laine, Xiao Yi