China’s producer prices dropped year-on-year for the 22nd straight month in December, while consumer prices rose less than predicted, the government said on Thursday, as observers pointed to a weakening of the world’s second-largest economy.

The producer-price index (PPI), which measures the price of a range of goods at the factory door, was down 1.4 per cent from December 2012, the National Bureau of Statistics said.

The consumer-price index (CPI) was up 2.5 per cent from the same month a year earlier, driven mainly by food prices, up 4.1 per cent year-on-year, and rent, which rose 4.7 per cent, it said.

The CPI increase was lower than the average 2.7-per-cent increase predicted by analysts surveyed by financial news agency Bloomberg, and a drop from the 3-per-cent year-on-year increase in November.

The data follow declines activity in the manufacturing and services sectors recorded by surveys of purchasing managers, Bloomberg said.

The slowdown has raised fears of China’s gross domestic product growth edging down closer to the government-declared bottom line of 7 per cent.

But any measures to stimulate the economy could be considered risky amid a growth in credit and increase concerns of bad loans, Bloomberg pointed out.

Average consumer prices in 2013 were 2.6 per cent higher than in 2012, well below the government’s stated target of 3.5 per cent.

The PPI for the year was down 1.9 per cent.

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