February consumer inflation fell 0.7 per cent year on year, while prices at the factory gate were down 2.2 per cent.<\/b>
\nJust days after China lowered its annual consumer inflation control target from around 3 per cent to around 2 per cent \u2013 following two years in which the actual reading has languished at 0.2 per cent \u2013 the National Bureau of Statistics said February\u2019s consumer price index (CPI) fell 0.7 per cent year on year.
The inflation gauge for the first two months of this year \u2013 including the movable Lunar New Year holiday \u2013 dropped 0.1 per cent compared with the same period last year, the bureau announced on Sunday.
Economists polled by Chinese financial data provider Wind had forecast the CPI would decline by 0.35 per cent last month.
Food prices declined by 3.3 per cent year on year in February, while service prices fell by 0.4 per cent.
Core inflation, which excludes volatile food and energy prices, fell 0.1 per cent year on year last month. It rose 0.3 per cent year on year in the January-February period.
China\u2019s producer price index (PPI), which tracks the cost of goods at the factory gate, fell by 2.2 per cent, compared with a 2.3 per cent drop in January. It marked the 29th consecutive month of contraction.
\u201cChina\u2019s economy still faces deflationary pressure,\u201d said Zhiwei Zhang, chief economist of Pinpoint Asset Management.<\/p>\n