China’s Consumer Inflation stayed flat at 1.4% in March

According to official data, China's consumer inflation remained unchanged at 1.4% last month and producer prices dropped slightly less than anticipated.

It has been predicted by analysts polled by Reuters that March consumer price index (CPI) will be at 1.3% than 1.4% posted the previous month. As per experts, the producer price index (PPI) decreased 4.6%.

It has been expected that producer prices will drop 4.8% from a year earlier, identical to the preceding month. A surprise growth has been seen in manufacturing activity in March. Economists and policymakers are concerned that the risk of deflation is increasing for the second-largest economy of the world. It has been rising because of the drag from a property market downturn, and widespread factory overcapacity is compounded by an unsure global outlook and soft commodity prices.

Analysts mention serious economic headwinds involving weak demand and decreasing oil prices which have offset increasing utilities and public services prices. Numerous cuts to guidance lending rates have been made by the People's Bank of China (PBOC). The bank made reduction to the reserve requirement ratios at banks.

In April, a long-awaited deposit insurance programme has also been launched by it. According to economists, those steps did not have much impact on real borrowing costs.

"Consumer price inflation held steady in March but we expect a drop in food price inflation to pull it lower over the coming months", wrote Julian Evans-Pritchard of Capital Economics in a research note.

According to ANZ economists Zhou Hao and Liu Ligang, the weak inflation profile recommends that there is a need of further monetary policy easing despite latest retreats of onshore money market rates.