Inflation in China fell to 1.6 percent in September, the government said Wednesday, below analysts' forecasts and the lowest in the world's second-largest economy for almost five years.

The consumer price index (CPI) figures released by the National Bureau of Statistics represented a slowdown in year-on-year inflation from 2.0 percent in August.

It was the lowest since January 2010. Analysts polled by Dow Jones Newswires had predicted 1.7 percent.

The figures fall well short of the 3.5 percent annual target set by the government in March, and signal that deflationary pressures are rising.

Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can weigh on growth.

The latest figures give authorities more room to take steps to stimulate the economy, as statistics suggest that Chinese expansion -- which stood at 7.7 percent last year, maintaining its slowest pace in more than a decade -- is weakening.

"China's soft inflation profile heightens the risk of deflation, thus requiring further monetary policy easing," ANZ analysts said in a research note.

They attributed the sluggish price increases to the country's ongoing fight against corruption and a government austerity drive.

"The anti-graft campaign could have significantly eased upward pressures on prices. Notably... the price of tobacco and liquors has dropped to negative territory since September 2013," they said, referring to arguably the two most popular gifts in the country.

- Growth concerns -

China's exports and imports both rose more than expected in September, Customs data showed Monday in a positive signal, but analysts warned that fundamentals remained weak.

Industrial production growth slowed sharply in August to its lowest level for more than five years, official data showed last month, while house prices have fallen for five consecutive months.

Officials are targeting economic growth of "about 7.5 percent" this year, the same as last year's objective.

The goal is normally exceeded, but senior officials have repeatedly sought to play down its significance this year.

China's third-quarter gross domestic product figures are due next week.

Last week the World Bank cut its forecast for Chinese growth to 7.4 percent for 2014 and 7.2 percent for 2015. The International Monetary Fund left its predictions unchanged at 7.4 percent and 7.1 percent, but warned of "near-term growth risks", especially in real estate.

China's vast and crucial property sector is struggling in the face of oversupply.

A sharp slowdown in food price increases, from 3.0 percent in August to 2.3 percent in September, drove the inflation decline, the NBS said.

But some economists were less concerned about deflation.

Julian Evans-Pritchard, an analyst with research firm Capital Economics, said China's inflation remains highly sensitive to pork prices, which are set to rise.

"We still expect inflation to edge up again over the coming quarters, though it is unlikely (to) pick up enough to become a policy concern," he said in a report.

China's producer price index (PPI) -- a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI -- fell 1.8 percent year-on-year in September, the NBS said separately.

The last PPI increase was in January 2012, when it rose 0.7 percent.