Consumer price index, the main gauge of inflation, is projected to rise 2.3 percent in February, down 0.2 percentage points from that of last month, according to a report released by Industrial Bank Co Ltd on Wednesday.

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Food prices are set to grow slightly, 2.4 percent, this month, while non-food inflation is expected to rise 0.2 percent. Both slower than those in January.

Prices of aquatic products, meat, egg, vegetables and bean products have fallen during mid-February, after a sharp rise in the Spring Festival. Meanwhile, fruit prices remain unchanged, according to the National Bureau of Statistics.

"Low inflation, coupled with industrial overcapacity and short-term stock pressure, will further raise concerns over China's economic slowdown," said Lu Zhengwei, chief economist of Industrial Bank Co Ltd.

Meanwhile, the producer price index is expected to drop 2.1 percent year-on-year in February, as prices of major production materials experience a sharp correction in the same period.

The report shows that other economic indicators, including investment, trade, consumption and new credit loans, will continue to decline, albeit within a narrow range.

"The tepid growth of the country's economic impetus may indicate risk of deflation, if the current exchange rate policy remains unchanged," Lu said.

The year-on-year growth of fixed asset investment and total retail sales of consumer goods will fall to decade-low level in February, the report says.

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