China's consumer inflation slightly moderated in March, recovering from a supply shock brought by the novel coronavirus outbreak, official data showed Saturday.

The prices of daily necessities such as grains and oils, meat, poultry and vegetables dropped in March from previous highs. The wholesale price of vegetables on March 27 had fallen by 16.5 percent from the end of February, and the price of pork was down 7.4 percent from its high in mid-February.

Food prices constitute nearly one-third of weighting in China's CPI. Last month they were up 21.9 percent year on year, contributing 4.45 percentage points to the index rise as COVID-19 dented market supplies and demand.

Chen Yulu, deputy governor of the People's Bank of China, the central bank, noted last week that whether prices of commodities can be stabilized hinges on economic fundamentals, and there is no basis for long-term inflation or deflation. 

China's consumer price index (CPI), the main gauge of inflation, edged up by 5.3 percent year on year in February, driven by structural factors and the impact of the epidemic on overall supply, said Chen. 

"The impact of the epidemic on supply and inflation may continue for a short period of time, yet the overall situation will gradually change for the better. There will be CPI declines quarter by quarter in the rest of the year." 

As of March 27, 99.4 percent of agricultural wholesale markets had resumed business, with transaction volume skyrocketing by over 50 percent compared to the beginning of February.

All e-commerce platforms are back in business, and sales on some online marketplaces increased by more than 30 percent. The resumption rates of large supermarket chains and convenience stores reached 99.5 percent and 95.4 percent respectively, with sales exceeding the levels registered in the same period last year.

In light of the impact of COVID-19 on consumer activity and service providers, the Chinese government is exempting a wide range of consumer services from value-added tax (VAT) nationwide.

In Hubei Province, VAT is waived off, while elsewhere in China, the VAT rate is reduced to 1 percent, which will be valid until May 2020.