China's annual consumer price inflation ticked down to 1.9 percent in September from August's 2.0 percent, official data showed on Monday, leaving plenty of room for further policy easing to shore up growth.
The headline consumer inflation number matched the forecast of economists polled by Reuters.
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Analysts say consumer inflation running well below the 4 percent annual target set by the government leaves room for policymakers do more to support the economy, which Q3 data due on October 18 is likely to confirm has suffered a seventh successively slower quarter of annual growth.
"This is little surprise in the inflation data. It's mainly caused by the drop in food costs," said Zhou Hao, an economist at ANZ Bank in Shanghai. "On monetary policy, we can only say that there is a little more room for further policy easing. Exports have showed signs of stabilisation, but the economy still needs some policy loosening."
The National Bureau of Statistics said China's producer price index in September dropped 3.6 percent from a year earlier, which was also in line with forecasts.
It marked the seventh straight month of producer price deflation, hurting corporate profits and underpinning expectations that consumer inflation will stay tame in the coming months.
The central bank is widely expected to ease policy further, having cut interest rates twice since June and trimmed banks' required reserves three times since November.
Easing consumer prices and outright falls in factory gate prices are signs that the world's second-biggest economy is struggling to escape the tug of a global slowdown that has set China on course for its weakest full year of growth since 1999.
Yi Gang, deputy governor of the People's Bank of China, said in a speech at last week's annual meeting of the International Monetary Fund that he expected inflation to be about 2.7 percent for the full year, with growth around 7.8 percent.
But he said signs of resurgence in property prices, which the government has fought for more than two years to rein in, posed a dilemma for policymakers.
Real estate directly affects about 40 different business sectors in China and the government-induced slowdown is widely regarded by analysts as putting an extra brake on the economy.
(Reporting by Lucy Hornby; Editing by Alex Richardson)