China’s inflation eased more than forecast from a 10-month high as food-price gains ebbed, reducing pressure on policy makers to tighten credit as the world’s second-largest economy recovers from a slowdown.

The consumer price index rose 2.1 percent in March from a year earlier, the National Bureau of Statistics said Tuesday in Beijing. That compares with the 2.5 percent median estimate in a Bloomberg news survey of 38 economists and a 3.2 percent gain in February when spending for the Lunar New Year holiday pushed up prices.

Slowing price gains are a boost for Premier Li Keqiang as he seeks to sustain a rebound from the economy’s weakest annual expansion in 13 years. Authorities have drained cash from the financial system this year, with central bank Governor Zhou Xiaochuan saying that China should be on “high alert” after February’s inflation figure exceeded forecasts.

“Market concerns about central-bank tightening, which have been heavy after a high inflation reading in February, will be greatly relieved,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. “The central bank may have no need to raise benchmark interest rates or the required- reserve ratio this year.”

Food costs rose 2.7 percent in March from a year earlier, less than half of February’s 6 percent pace. The CPI fell 0.9 percent from February, the biggest drop in seven years.

Producer prices fell 1.9 percent from a year earlier, the 13th straight decline, compared with February’s 1.6 percent drop and matching the median estimate in a Bloomberg survey of 32 economists.

The benchmark Shanghai Composite Index of stocks rose 0.4 percent as of 10:42 a.m. local time, poised for the first gain in five sessions.

China is targeting inflation of about 3.5 percent this year, then-Premier Wen Jiabao said in his final annual report to the legislature on March 5, lowering the goal from last year’s 4 percent. Consumer prices rose 2.6 percent in 2012, less than half 2011’s pace. For the first quarter, inflation was 2.4 percent.

China’s customs administration is scheduled to publish March trade data tomorrow. The statistics bureau on April 15 will release data on first-quarter GDP and fixed-asset investment and March industrial production and retail sales. Figures last month showed factory output and retail sales had the weakest start to a year since 2009.

“The main risk facing the economy is still weak growth, not inflation,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong.

JPMorgan’s Zhu said inflation may make a comeback toward the end of 2013 while price gains for the full year will be 3.1 percent or 3.2 percent, “well below” the 3.5 percent target. “The central bank may pay more attention to inflation in late 2013, although this does not mean serious monetary policy tightening.”

Bloomberg surveys last month showed 14 of 33 analysts forecast an increase in the benchmark one-year lending rate this year, while two out of 22 respondents said the central bank would raise lenders’ reserve-requirement ratio.

The People’s Bank of China said in an April 3 statement that it will continue to seek a balance between growth and inflation under a “prudent monetary policy” framework. Zhou said in a press briefing last month that monetary policy is “no longer relaxed” and is “relatively neutral.”

That neutral stance “should continue for one or two more quarters,” said Yao Wei, China economist at Societe Generale SA in Hong Kong. There’s “no need for the PBOC to switch to tightening mode for the moment,” she said. (Bloomberg)