- Julian Evans-Pritchard, China economist at Capital Economics
China's consumer inflation remained steady in March, showing little sign that the Chinese government's easing measures to date have considerably cut worrisome deflationary pressure. Cost of living in the world's second largest economy climbed 1.4% on year in March, beating expectations for a 1.3% increase and following the 1.4% rise in the preceding month. Nevertheless, wholesale prices remained entrenched in deflation, with the producer price index falling 4.6% in March.
A precipitous decline in global oil prices, sluggish consumption and a slowdown in the property sector have pushed prices lower in recent months, even as the Chinese economy braces for slower growth this year. China's officials last month set a growth goal of around 7% for this year. The world's second biggest economy expanded 7.4% in 2014, the slowest pace in 24 years. Meanwhile, the consumer price index target was set at around 3% for this year. Annual consumer inflation was 2% in 2014, significantly below the government's inflation goal of 3.5%. In a bid to underpin slowing economy, the People's Bank of China has injected monetary stimulus three times since November, introducing two interest rate cuts and reducing the reserve requirements of major banks.
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