By Gina Lee

Investing.com – China’s saw its pace quicken, according to Monday’s official data showed on Monday. However, the world’s second-largest economy continues to deal with the inflationary pressures from Russia’s invasion of Ukraine on Feb. 24 and its latest COVID-19 outbreak.

Data from the National Bureau of Statistics showed that China’s consumer price index grew 0% . Forecasts prepared by Investing.com predicted a 0.1% contraction, while the previous month’s growth was 0.6%.

The CPI grew 1.5% , compared to the 1.2% growth predicted in forecasts prepared by Investing.com and the previous month’s 0.9% growth.

Data also revealed that 8.3% of the population grew. Year-on year, the forecasts from Investing.com predict a 7.9% increase and a 8.8% rise during the preceding month.

China’s economic recovery came under downward pressure in March 2022, as the country battles its latest COVID-19 outbreak. The manufacturing sector and the service sectors both saw a decline.

The government responded by revealing policies that would support the economy, including more fiscal spending and a reduction in the income tax for small businesses. China’s State Council pledged more support for investment and consumption during the past week.

Food prices fell 1.5% year-on-year in March, compared to the previous month’s 3.9% drop, which resulted in a drop of 0.28 percentage points in headline CPI. The still modest consumer inflation was an indication that demand remains weak, as the country’s strict COVID-19 control measures dented the sentiment in consumption.

China has reported 26411 COVID-19 asymptomatic cases, with 25,000 of these in Shanghai. This city remains locked down.

Shanghai’s economy will shrink 6% in April 2022 alone if the current lockdown persists, which is equivalent to a 2% gross domestic product decline for the whole of China, warned ING chief economist for Greater China Iris Pang.

Investors also anticipate the People’s Bank of China to reduce borrowing costs, cut bank reserve requirements and lower interest rates in order to inject cash into the economy.