The drop comes as Beijing seeks to boost domestic consumption, which has yet to recover from the pandemic.

The consumer price index (CPI) – a key measure of inflation – was down 0.7% year-on-year in February, according to data released by the national bureau of statistics (NBS).

The reading represented a steeper decline than the slump of 0.4% in the index forecast by a Bloomberg survey.

It also reversed the 0.5% uptick recorded in January, when a surge in spending during the Lunar New Year boosted inflation to its highest rate in months.

“This is mainly due to the impact of factors such as the (Lunar New Year) being in a different month, holidays and price fluctuations of some international staple commodities,” said Dong Lijuan of the NBS in a statement.