China inflation jumps but worries endure

China's consumer inflation rebounded in February from a more-than-five-year low, official data showed Tuesday, but a plunge in factory gate prices added to persistent concerns about deflation in the world's second-largest economy.

The 1.4 percent increase in the consumer price index (CPI) compared with a gain of 0.8 percent in January, according to National Bureau of Statistics (NBS) figures.

The result, which exceeded the median forecast for a 1.0 percent gain in a survey of analysts by Bloomberg News, came largely due to higher prices for food and services surrounding China's annual Lunar New year holiday, which economists largely saw as a one-off.

In contrast the producer price index (PPI) -- a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI -- declined for the 36th straight month in February.

The PPI fell 4.8 percent year-on-year, the NBS said, more than the 4.3 percent decline recorded in January, and the worst result since October 2009.

Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.

"We continue to expect inflation to remain relatively low and still see disinflationary pressures in the economy," Nomura economists said in an analysis of the February data.