Underlining concerns that China's huge economy is still struggling to recover momentum from the COVID-19 era, the nation's consumer price index (CPI) in March fell 0.1% on year in March, after declining 0.7% on year in February, reported the National Bureau of Statistics (NBS) on Thursday.

On month, China's CPI in March declined 0.4% from February, as residential rents and food prices eased.

In particular, China's property markets have struggled in the last two years with several large residential developers declaring bankruptcy or re-arranging debt obligations, as housing prices faltered.

The tepid March inflation report may spur the nation's central bank, the People's Bank of China, to move to monetary easing, said ING Think, an arm of the Dutch investment house.

"CPI inflation failed to rebound above the zero threshold in March as price (downward) pressures persist across the board. Combined with a sharp escalation of tariffs, this sets up a suitable window for the People's Bank of China to resume monetary policy easing," said ING Think.

The recently imposed US tariffs on some China goods may exacerbate deflationary pressures, said ING Think.

"US tariffs will worsen the overcapacity issues and likely prompt further price competition as exporters previously selling to the US market will need to find new buyers," added ING Think.

For all of 2025, China will likely face no inflation, as measured by the CPI, estimated ING Think. "In light of lower-than-expected inflation in the first quarter, as well as an escalation of tariffs which will worsen the overcapacity problem and intensify price competition, we are downgrading our 2025 CPI inflation forecast from 0.7% to 0.0% year-over-year," advised ING Think.

Separately, China's producer price index (PPI) shrank 2.5% on-year in March, worsening from the 2.2% decline seen in February, reported the NBS.

March marked the 30th-straight month that China's producer prices fell on year, according to NBS figures