The result was below expectations in a Bloomberg survey for contraction of just 0.3 per cent.

“The coronavirus outbreak is putting downward pressure on inflation. While supply chain disruptions have kept food prices high, weaker demand has weighed on the price of other goods and services,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

In February, the sudden outbreak of the coronavirus caused a complicated impact on the price trend, the NBS said in a statement. The rise in CPI was largely driven by an increase in food prices due to the implementation of transport control measures across the country, as well as logistic disruptions caused by a shortage of manpower, which increased costs.

The NBS noted that some regions suffered shortages of instant noodles, meat products and frozen foods as some residents hoarded certain products due to the lockdowns implemented to contain the spread of the coronavirus.

Within the CPI, pork prices remained high, jumping 135.2 per cent from a year earlier, up from 116 per cent in January. City lockdowns and transport restrictions due to the coronavirus outbreak exacerbated supply shortages caused by the African swine fever epidemic that devastated the nation’s pork population last year. Overall food prices jumped 21.9 per cent from a year earlier, which lifted the gauge by 1.3 percentage points.

The price of disinfectant products increased by 14.8 per cent, while the price of hygiene materials rose 1.5 per cent.

“Food price inflation picked up a bit due to supply chain disruptions and (possibly) hoarding. But this was more than offset by a sharp fall in non-food and core inflation (which strips out both food and energy prices), the latter to a nine-year low. This suggests that coronavirus outbreak has led to a marked weakening in demand-side price pressures. Especially noteworthy is the steep decline in both transportation and services inflation,” added Evans-Pritchard.

The 5.2 per cent rise in CPI is above the one-year loan prime rate (LPR) of 4.05 per cent, indicating that inflation-adjusted interest rates were negative in February.

The data for both CPI and PPI in February was collected before the 30 per cent crash in oil prices on Monday, which is set to resonate through the domestic energy industry and subsequently push down prices paid by both consumers and manufacturers in March.

In February, the price of oil and gas extraction in China dropped 11 per cent after rising 4.3 per cent in January. The price of oil, coal and other processed fuels dropped 4.4 per cent after a 1.8 per cent gain in January.

“[The fall in producer price inflation] was mostly driven by a pronounced decline in the price of raw materials. The price of manufactured inputs also edged down slightly, but with many factories closed or facing labour shortages for much of last month, we think that factory gate prices have yet to fully reflect the impact of weaker demand,” said Evans-Pritchard.

The CPI and PPI continue a string of data showing a weakness of economic activity due to the impact of the coronavirus outbreak.

China’s official non-manufacturing PMI – a gauge of sentiment in the services and construction sectors – also dropped, to a new low of 29.6 from 54.1 in January.

“Inflation should ease further in the coming months. The recent plunge in oil prices suggest that fuel inflation will fall. What’s more, supply-side disruptions should slowly ease as migrants return to work in factories and ports,” said Evans-Pritchard.

“And demand is likely to remain subdued in the near term given weakening global growth and the hit from the virus to domestic employment conditions. Declining core inflation and deepening factory-gate deflation will increase pressure on the [People’s Bank of China] to ease monetary conditions further.”