China's consumer price index missed expectations in January, coming in at 1.7 percent higher than a year ago, said the National Bureau of Statistics on Friday.
January marked the seventh straight month for According to Reuters records, the below consensus inflation figures suggest that demand "remains sad" at the beginning of 2019, which may stimulate official measures to support the economy, wrote Julian Evans-Pritchard, senior economy in China. at Capital Economics.
While the CPI remains at a "comfortable level", Evans-Pritchard said in a note on Friday that the weak producer prices are "a concern, as they are strongly correlated with industry profit growth."  He predicted that Beijing would roll out measures, such as cutting benchmark lending rates, to ease economic pressures on industrial companies such as factory gate inflation seem to be deepening in the coming months.
However, weak producer prices do not always lead to the CPI due to the concentration of heavy industries in the PPI, says chief Fenner, senior economist at Oxford Economics. Weak oil prices recently weighed on PPI, she noted.
"We still expect the difference between the two to continue," she told CNBC.
The data comes amid a new round of US-China talks in Beijing this week as the world's two largest economies renewed their efforts to reach an agreement to uncover trade tensions.