China February inflation quickens, beating forecasts, but factory deflation worsens

SHANGHAI (Reuters) - China's consumer inflation quickened to 1.4 per cent in February, beating market expectations, recovering from a five-year low in January, but factory deflation worsened, underscoring deepening weakness in the economy.

Analysts polled by Reuters predicted consumer inflation at 0.9 per cent, compared with 0.8 per cent in the prior month.

The producer price index declined 4.8 per cent in February, the National Bureau of Statistics said on Tuesday, extending factory deflation to nearly three years.

The market had expected producer prices to fall by 4.3 per cent, the same as in the prior month.

The risk of deflation is rising for the world's second-largest economy as a property market downturn and widespread factory overcapacity have been compounded by an uncertain global outlook and falling commodity prices.