Consumer inflation on the Chinese mainland rose less than expected at 2 per cent in May compared with the same month last year, indicating momentum for economic growth remained weak. Meanwhile, factory gate prices showed better-than-expected signs of recovery, according to figures released on Thursday. The rise in the consumer price index compared with an increase of 2.3 per cent in April, the National Bureau of Statistics said. Analysts had predicted inflation would remain largely unchanged. China’s consumer inflation holds steady as analysts say Beijing may halt further monetary easing to boost economy The lower-than-expected rise was mainly due to slowing increases in food prices, which gained 5.9 per cent last month compared with the same period last year, down from April’s rise of 7.4 per cent. Cold weather earlier this year hit production and pushed up vegetable prices, but increasing supply last month had started to drive prices back to normal levels, the statistics bureau said. Pork prices remained high. Housing prices, which have seen large rises this year, were not fully reflected in the index. China International Capital Corporation, a leading brokerage firm, said vegetable prices would continue to fall and there was limited room for pork prices to rise further, which might lead the index to further moderate in June. China’s consumer inflation holds steady at 2.3 per cent The producer price index fell 2.8 per cent in May compared with the same period last year, extending its falling streak to 51 months. That compares to a drop of 3.4 per cent in April. Analysts had predicted the index would fall 3.3 per cent last month. The index rose 0.5 per cent in May compared with the previous month, marking the third month-on-month gain. The upbeat reading last month was due to the rising prices of domestic steel and petrochemical products Li Huiyong, economist, Shenwan Hongyuan Securities “The upbeat reading last month was due to the rising prices of domestic steel and petrochemical products which are affected by the recovery in global commodity prices,” said Li Huiyong, chief economist with Shenwan Hongyuan Securities. Overall inflation remained low, Li said. A consumer price index rise of about 3 per cent was deemed a comfortable reading and a producer price index at a similar level would benefit corporate investment, he said. “Unless the Federal Reserve surprisingly announces a rate hike, China’s policies will remain [as they are] while it presses ahead with supply-side structural reforms,” he said.