China's consumer prices suffered their steepest fall in more than 14 years in January while producer prices also dropped.

The world's second-biggest economy has been grappling with slowing prices since early last year, forcing policymakers to cut interest rates to spur growth even as many developed economies were focused on taming stubbornly high inflation.

The consumer price index (CPI) fell 0.8 percent in January from a year earlier, after a 0.3 percent drop in December, data from the National Bureau of Statistics showed on Thursday. The CPI rose 0.3 percent month-on-month from a 0.1 percent uptick the previous month.

Economists polled by Reuters news agency had forecast a 0.5 percent fall year-on-year and a 0.4 percent gain month-on-month.

The annual CPI decline in January was the biggest since September 2009, mainly led by a sharp drop in food prices.

Meanwhile, the producer price index slid 2.5 percent from a year earlier in January after a 2.7 percent fall the previous month, compared with a 2.6 percent slide forecast in the Reuters poll.

Factory-gate prices were down 0.2 percent from a month earlier, after falling 0.3 percent in December. (Reuters)