BEIJING -- China's consumer inflation returned to positive territory in August, while the factory-gate price decline moderated, adding to evidence for a sustained recovery in the world's second-largest economy, official data showed Saturday.

The consumer price index, a main gauge of inflation, edged up 0.1 percent year-on-year in August, rebounding from a slip of 0.3 percent in July, according to the National Bureau of Statistics.

On a monthly basis, the CPI also improved, rising 0.3 percent in August from the previous month, a notch higher than July's 0.2 percent growth.

The NBS statistician Dong Lijuan attributed the CPI pick-up to the continuous improvement of the country's consumer market and supply-demand relationship.

The average CPI for the January-August period increased 0.5 percent year on year, according to the NBS.

The reading also came as a summer travel rush boosted the sectors of transportation, tourism, accommodation, and catering, with rising prices of services and non-food items offsetting lower prices of food and consumer goods, said Bruce Pang, the Greater China chief economist of real estate and investment management services firm JLL.

In breakdown, food prices fell 1.7 percent year-on-year in August, but prices of non-food items and services rose 0.5 percent and 1.3 percent, respectively, from one year earlier.

The core CPI, deducting food and energy prices, rose 0.8 percent year-on-year in August, with the pace of increase unchanged compared with July.

The producer price index, which measures costs for goods at the factory gate, went down 3 percent year on year in August. The decrease narrowed from a 4.4-percent decline in July to a 5.4-percent drop registered in June.

On a monthly basis, the August PPI edged up 0.2 percent, reversing a decrease of 0.2 percent in July, according to the NBS data.

Dong said the improvement of August's PPI came as a result of multiple factors, including improving demand for certain industrial products and higher international crude oil prices.

The average PPI in the first eight months of the year went down 3.2 percent year on year, unchanged compared with the January-July period, the data showed.

Saturday's data indicated that as the country unveiled economic supportive policies and enhanced counter-cyclical adjustments, the effects of measures to boost domestic demand continued to emerge, Pang said.

The inflation data came following an array of indicators that point to a sustained momentum of China's economic recovery.

The Chinese economy has continued the upward trend so far this year, but challenges remain amid a complex global environment and insufficient domestic demand.

Analysts believe China has multiple options in its policy toolkit to consolidate further the economic momentum, including adjustments in banks' reserve requirement ratio and optimizing credit policies for the property sector.

With the inflation rate remaining low, there is still the necessity and possibility for further interest rate reduction, Pang said.