CHINA’S consumer inflation was more muted than expected in April and producer prices fell for the 37th consecutive month, adding to concerns about growing deflationary pressures.

    Annual consumer inflation picked up a shade to 1.5 percent in April, the National Bureau of Statistics said Saturday, edging up from 1.4 percent in March but below the 1.6 percent predicted by analysts.

    A seasonal jump in food prices aside, some economists said the figures pointed to moderate price pressures and lackluster domestic demand in the country.

    “Consumer prices remained sluggish in April and the risk of deflation still lingers,” analysts at Haitong Securities said in a note. “There is a need to cut interest rates again.”

    Worried about China’s economy, whose growth cooled to a six-year low of 7 percent in the first three months of this year, the central bank cut interest rates and relaxed banks’ reserve requirements five times in six months.

    It cut its benchmark lending rates by 25 basis points to 5.1 percent yesterday, the third reduction since November. It also reduced one-year benchmark deposit rates by 25 basis points.

    Indeed, the central bank acknowledged Friday the growth challenges, when it said the economy faced headwinds and that the inflation outlook was benign, but ruled out the need for quantitative easing.

    Wary about following in the footsteps of Japan, where a decade-long fall in consumer prices has hurt the economy, Chinese officials have warned about the danger of deflation, saying a cooldown in inflation to under 1 percent would raise red flags.

    Many economists also expect more support measures for the ailing housing market.

    Saturday’s data showed higher food prices drove April’s inflation, with pork prices climbing 8.3 percent. Overall annual food inflation was also buoyant, quickening to 2.7 percent in April, compared to 0.9 percent for non-food inflation.

    And in a sign that China’s anti-graft campaign has also dented spending, liquor prices fell 0.5 percent in April for the 19th consecutive month.

    But producer prices remained stubbornly weak, with the producer price index sliding 4.6 percent. The market had expected producer prices to fall 4.4 percent on an annual basis after a decline of 4.6 percent in March.(SD-Agencies)