09.03.201800:32:00UTC+00China's Inflation Highest Since 2013

China's inflation rose sharply to the highest level in more than four years in February driven by a rebound in food prices. Meanwhile, producer price inflation slowed to a 15-month low.

Elsewhere, People's Bank of China Governor Zhou Xiaochuan said China is in a period of stabilizing and gradually reducing leverage. He said China will reduce its reliance on capital support as it aims higher quality growth.

Inflation rose to 2.9 percent in February from 1.5 percent in January, the National Bureau of Statistics reported Friday. This was the highest since November 2013. The increase in inflation was largely caused by the timing of the lunar new year holiday.

The inflation rate was forecast to rise moderately to 2.4 percent. The government targets around 3 percent inflation for 2018.

Food prices advanced 4.4 percent and non-food prices climbed 2.5 percent in February.

Month-on-month, inflation doubled to 1.2 percent from 0.6 percent a month ago.

In a separate communique, producer price inflation weakened to 3.7 percent in February from 4.3 percent a month ago. Inflation has slowed for the fourth straight month.

On a monthly basis, producer prices dropped 0.1 percent, reversing a 0.3 percent rise in January.

A further rise in food inflation will keep the headline rate elevated over the next few months, Chang Liu, an economist at Capital Economics. In contrast, producer price inflation is expected to continue easing.