China's main gauge of consumer prices softened in November, again raising concerns the region's dominant economy is only sluggishly recovering from the pandemic era, undercut by weakness in its industrial and property sectors.

Mainland China's consumer price index (CPI) rose a modest 0.2% year on year in November, but declined 0.6% from October, reported the National Bureau of Statistics on Monday.

The nation's core CPI, that strips out certain food and energy bills, increased a modest 0.3% on year, but also fell 0.6% from October, added the NBS.

"China's CPI inflation unexpectedly fell to a five-month low," noted ING Think, and arm of the Dutch investment house. "The unexpectedly weak November read further confirms our view that there is still plenty of room for monetary policy easing in the months ahead."

China's central bank, the People's Bank of China (PBOC), has an annual inflation target on the CPI of "about 3%."

Yet deflation could be in the picture, said ING Think.

"November's data does raise the possibility that we could see several months of negative year-on-year (CPI) growth if food prices continue to come in softer than expected, as non-food prices continue to show deflationary pressure," said the research house.

Beijing in recent months has announced various fiscal stimulus and bond programs intended to boost domestic spending and the region's largest economy.

In addition, the PBOC has moderately lowered interest rates and reserve requirement in 2024, but critics have said more stimulus in needed.

"Markets have been discussing the possibility of an imminent RRR (reserve requirement ratio) cut which is certainly on the table, but the inflation data shows that there is capacity to bundle an RRR cut with a further interest rate cut as well. We are expecting 30 basis points of rate cuts and 100 basis points of RRR cuts before the end of 2025," said ING Think.

In general, the RRR refers to the amount of cash a bank has to keep in-house, versus the mount of loans outstanding. Lowering the RRR allows a bank to expand the amount of lending it does, in comparison to cash in the vault.

Since the pandemic, China's economy has been weighted by a struggling property sector, and soft industrial demand. Some of China's largest residential real estate developers, such as China Evergrande, have gone bankrupt on weak demand and slumping property values.

In a sign of underwhelming industrial demand, China's producer price index (PPI) fell 2.5% on year in November, extending a run of on-year declines back to October of 2022, added the NBS.