“China’s inflation eased more than forecast from a 10-month high as food-price gains ebbed, reducing pressure on policy makers to tighten credit as the world’s second-largest economy recovers from a slowdown.
The consumer price index rose 2.1 percent in March from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.5 percent median estimate in a Bloomberg news survey of 38 economists and a 3.2 percent gain in February when spending for the Lunar New Year holiday pushed up prices.
Slowing price gains are a boost for Premier Li Keqiang as he seeks to sustain a rebound from the economy’s weakest annual expansion in 13 years. Authorities have drained cash from the financial system this year, with central bank GovernorZhou Xiaochuan saying that China should be on “high alert” after February’s inflation figure exceeded forecasts.
“Market concerns about central-bank tightening, which have been heavy after a high inflation reading in February, will be greatly relieved,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. “The central bank may have no need to raise benchmark interest rates or the required- reserve ratio this year.”
Food costs rose 2.7 percent in March from a year earlier, less than half of February’s 6 percent pace. The CPI fell 0.9 percent from February, the biggest drop in seven years.
Producer prices fell 1.9 percent from a year earlier, the 13th straight decline, compared with February’s 1.6 percent drop and matching the median estimate in a Bloomberg survey of 32 economists.
