China's consumer prices rose slightly on an annual basis in May, breaking a three-month streak of declines, while factory-gate prices continued to fall last month.

The country's consumer price index (CPI), the main gauge for inflation measuring the cost of goods and services, rose 0.2 percent in May compared to a year ago, data from the National Bureau of Statistics(NBS) showed on Friday.

Consumer demand continued to recover and the market was generally stable for the month, explained Dong Lijuan, the chief statistician of NBS.

Meanwhile, the producer price index (PPI), which measures costs for goods at the factory gate, declined 4.6 percent in May, compared to a year ago.

The decline in the PPI, said Dong, could be attributed to lower international commodity prices, generally weak demand in both the domestic and global markets, coupled with a relatively high base for the same period last year.

Several analysts told CGTN that China is not presently facing worrying levels of deflationary pressures.

"Global commodity prices are one of the factors that affect the price of industrial goods," said Derek Deng, a partner at Bain & Company. At the same time, because Chinese consumers tend to shop online, those typically lower online prices without intermediaries have also had an impact on consumer prices, he added.

"The deflationary pressure is not necessarily bad news for industrial companies," said Hong Hao, an economist at the GROW Investment Group, adding that the deflationary pressures in upstream industries are greater than that in the downstream sectors.

He added that the gap between CPI and PPI continues to widen, which means that the profit margins of industrial enterprises are also expanding.

Bruce Pang, chief economist and head of research at JLL Greater China, told CGTN that there is so far no basis to expect any long-term deflation or inflation for the country. This, he said, was based on current balance of total supply and demand, appropriateness of monetary and credit conditions, and the confidence of market players.

"Overall, China is now at the stage of 'disinflation' rather than 'deflation.' As the economy continues to improve and effective demand continues to pick up, the annual increase will return to the 'reflation' stage," Pang said, adding that CPI is expected to pick up in the third quarter of 2023 and gradually return to a reasonable level.

Additionally, he said that lower prices and inflation levels will leave more room for fiscal policy adjustments.