BEIJING - China's Producer Price Index (PPI), a main gauge of inflation at the wholesale level, rose 0.7 percent in January year-on-year, the lowest since December 2009, the National Bureau of Statistics (NBS) said Thursday.

The reading eased further from December's 1.7-percent growth, as most of the country's factories suspended production during the Chinese Lunar New Year holiday.

On a month-on-month basis, China's January PPI fell 0.1 percent from December, the NBS said in a statement on its website.

Producer purchase prices grew 2 percent year-on-year in January and were down 0.3 percent from a month ago, said the NBS.

Economist Dong Xianan said the January PPI growth was in line with expectations and the growth would continue to decelerate in February.

"With the further easing of inflationary pressures, the growth in the country's producer prices may pick up in the second half of this year if demand improves," he said.