China inflation jumps in March, but only as expected

But underlying inflationary pressures remained well contained and according to economists at Capital Economics were set to slow further before bottoming out later in 2019.

According to the National Bureau of Statistics, the year-on-year headline rate of CPI gains accelerated from 1.5% for February to 2.3%, matching economists' forecasts.

That was the highest reading since October 2018.

But stripping out the food component, the annual rate of CPI only edged higher from February's print 1.7% to 1.8% (consensus: 1.8%).

Food prices on the other hand rose by 4.1% on the year, following gains of 0.7% in February and of 1.9% in January.

Julian Evans-Pritchard attributed the drop in food costs in February to the shift in the timing of the Lunar New Year this year versus last.

Pork prices were the main driver behind the accelerated pace of gains in March, jumping by 5.1% last month after dropping by 4.8% in February, as a result of supply disruptions caused by African swine flu.

At the factory gate level meanwhile, prices rose at a clip of 0.4% year-on-year, after a dip of 0.1% in the month before, but here too it was non-core items that were mostly responsible for the gains, Evans-Pritchard said.

Meanwhile, prices for manufactured industrial inputs and consumer goods "held broadly steady", he said.

"Looking ahead, we expect oil prices to fall back in the coming months. This will drag down PPI, though we expect the impact on CPI to be offset by a further rise in pork prices.

"We still expect some easing of broader price pressures in the near-term given our view think that economic growth will weaken further in the coming months before bottoming out later this year."