BEIJING: Chinese producer prices declined at their slowest rate in 16 months in April, official data showed Tuesday, a positive sign for the world's second-largest economy.
The producer price index (PPI), which measures prices of goods at the factory gate and is a leading indicator of consumer inflation, fell by 3.4 percent from a year ago, the National Bureau of Statistics (NBS) said in a statement.
The figure was ahead of the median estimate of a 3.7 percent decline in a Bloomberg News survey of economists, and the indicator's best performance since December 2014.
Moderate inflation can be a boon to consumption as it pushes buyers to act before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.
The "significant moderation" of the PPI falls was largely due to rising commodity prices and higher production driven by infrastructure investment, Nomura analysts said in a note, adding: "PPI deflation may continue to narrow."
China's economy, a vital driver of global expansion, grew 6.9 percent last year, the slowest in a quarter of a century.
Producer prices in the Asian giant have been falling for years, and low consumer inflation had stoked fears of deflation until recently.
The consumer price index rose 2.3 percent year-on-year in April, the NBS said in a separate statement, in line with expectations and the same figure as the previous two months.
The figures may bring some cheer to the Chinese economy, which is grappling with slowing growth, huge overcapacity and mounting debt problems.
Month-on-month, the PPI increased by 0.7 percent, the second rise in a row.
NBS analyst Yu Qiumei said in a statement: "Price increases in some industrial sectors accelerated", including in natural resource extraction.
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