March CPI 0.1 yy vs Feb 0.7
March PPI 2.8 yy vs Feb 2.7
Overcapacity issue is passing into prices, analyst says

BEIJING, April 11 Reuters China39;s consumer inflation cooled more than expected in March, while producer price deflation persisted, maintaining pressure on policymakers to launch more stimulus as demand remains weak.

Worrying deflationary pressures in the world39;s secondlargest economy appear to be slowly easing, though a protracted property crisis is still weighing heavily on consumer and business confidence.

Consumer prices rose by a muted 0.1 in March from a year earlier, National Bureau of Statistics NBS data showed on Thursday, versus a 0.7 rise in February which was the first gain in six months and a 0.4 rise in a Reuters poll.

Data over the JanuaryFebruary period and factory surveys for March showing improving demand had been a relief for Chinese officials seeking to spur a feeble postCOVID recovery, but economists warned of Lunar New Year distortions.

Seasonal effects definitely played a role food prices rose sharply during the Chinese New Year in February and subsequently came back down, said Xu Tianchen, senior economist at the Economist Intelligence Unit.

More broadly, the overcapacity issue is passing into prices in a way that will thwart the People39;s Bank of China39;s efforts to reflate the economy, Xu added. Vehicle prices fell an annual 4.6, which could suggest manufacturers are introducing deeper price cuts in the distribution and…