China's consumer inflation up 1.4%, but below official target

China's consumer inflation slightly rebounded in February to 1.4 percent from a year earlier, but remained far below the government's inflation target, official data showed Tuesday.
The consumer price index (CPI), a main gauge of inflation, grew from January's 0.8 percent expansion, which was the slowest rise since November 2009, the National Bureau of Statistics said in a statement. Last week, Chinese Premier Li Keqiang announced that the government has set this year's consumer inflation rate target at around 3 percent, down from 3.5 percent in 2014.
Food prices, which account for a third of the basket of goods in China's CPI calculation, rose 2.4 percent year-on-year last month. However, the producer price index (PPI), a key index of inflation at the wholesale level, declined 4.8 percent in February from the year before for the 36th straight month amid sluggish domestic demand. The index dropped at a fastest pace since March 2012 when it started a downward trend.
Yu Qiumei, senior statistician of the bureau, attributed the recovery to rising food and travel prices during the Chinese Lunar New Year Holiday, state-run Xinhua News Agency reported. Distortions caused by the timing of the Spring Festival, which fell on January 31, 2014 but on Feb. 19 this year, also played a part, Yu explained. He also said the slower PPI decline was due to an improvement in the factory-gate prices in oil processing, chemical, and non-ferrous metal industries.
The world's second-largest economy grew 7.4 percent in 2014, its slowest pace in 24 years and a string of economic indicators for the new year, including manufacturing and trade data, all suggested continued weakness, according to Xinhua. The annual government work report, delivered by Li at the national legislature's annual session on March 5, set this year's economic growth target at around 7 percent.