Analysts: Policy continuation likely after producer price index falls

Producer deflation narrowed more than expected in May while the rise of consumer price inflation was below market expectations, reinforcing the case for continuation of accommodated economic policies to prop up growth, analysts said on Thursday.

Production deflation eased in May as the producer price index fell 2.8 percent year-on-year, lower than the market expectation of 3.3 percent and the decline of 3.4 percent in April, according to the National Bureau of Statistics.

The consumer price index, a gauge of inflation, rose 2 percent from a year earlier, lower than the consensus forecast of 2.2 percent,