Chinese consumer inflation increased slightly in August to hit a six-month high, official data showed Monday, but the reading missed expectations and did little to soothe worries about sluggish spending in the world's second-largest economy, with core inflation cooling to its weakest in more than three years.

Leaders in Beijing have been seeking to boost domestic activity as property sector woes and trade frictions weigh on confidence.

However, a sputtering start in the second half is mounting pressure to roll out more policies amid a prolonged housing downturn, persistent joblessness, debt woes and rising trade tensions.

The consumer price index (CPI) – a key measure of inflation – rose 0.6% year-on-year in August, up slightly from 0.5% in July, the National Bureau of Statistics (NBS) said.

The figure was the highest since February but came in slightly lower than the 0.7% forecast in a Bloomberg survey of economists.

Extreme weather this summer, from deadly floods to scorching heat, has pushed up farm produce prices, contributing to faster inflation.

China's affected crops due to various natural disasters totaled 1.46 million hectares in August, state media reported on Monday.

"The higher CPI in August was due to high temperatures and the rainy weather," NBS statistician Dong Lijuan said in a statement.

Food prices jumped 2.8% year-over-year in August, unchanged from July, while non-food inflation was 0.2%, easing from 0.7% in July.

"But the rebound was softer than expected and did little to ease deflation concerns. Much of the improvement has been food reflation, which is susceptible to fluctuating weather conditions and capacity changes," said Junyu Tan, North Asia Economist at Coface.

"Despite a weather-related surge in vegetable prices, a fall in energy prices and core inflation meant CPI only rose a touch," said Gabriel Ng, Assistant Economist at Capital Economics, in a note Monday.

While many major Western economies have been grappling with the threat of high inflation, China has instead been looking to avert another dip into deflation.

At the end of 2023, the country sank into deflation for four months, with the sharpest contraction in consumer prices in 14 years in January.

"Deflation remains a major risk for China's economy," said Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management, in a note Monday.

"The fiscal policy stance needs to become more proactive in order to prevent the deflationary expectations from being entrenched," added Zhang.

Core inflation, excluding volatile food and fuel prices, was 0.3% in August – the lowest in nearly three and a half years – down from 0.4% in July.

China's yuan dipped against the dollar on Monday as long-dated yields hit record lows after monthly inflation data added to economic worries and calls for fresh easing. China stocks ended morning trade lower.

In extreme comments, China's ex-central bank governor Yi Gang urged efforts to fight deflationary pressure at the Bund Summit in Shanghai last week.

A national campaign to earmark $41 billion in ultra-long treasury bonds to support equipment upgrades and trade-in of consumer goods has proven lukewarm in spurring consumer confidence, with domestic car sales extending declines for a fourth month in July.

"These policies will take time to filter through, so a demand-led reflation is obviously not yet on the horizon," Tan said.

The NBS also announced Monday that factory-gate prices slid 1.8% year-on-year, extending a deflationary run that has lasted since late 2022.

Chinese officials have ramped up support measures for the private sector recently in a bid to stimulate activity and spur household consumption.

However, they have refused to unveil the bazooka-like stimulus seen during the global financial crisis which many have called for.

Beijing has said it wants annual economic growth this year of around 5%.

However, that is considered ambitious by many experts as a property sector crisis and high youth unemployment continue to complicate efforts to achieve a full post-pandemic recovery.

"The ongoing deflationary pressures boil down into a broader problem of production surplus, which is still outstripping demand," said Tan of Coface.

Faltering economic activity has prompted global brokerages to scale back their China 2024 growth forecasts below the official target of around 5%.