BEIJING - A drop in China's inflation rate has boosted consumer and entrepreneur confidence, as measures taken to tame consumer prices are continuing to make an impact, the People's Bank of China (PBOC) said Tuesday.

The Residents' Price Satisfaction Index rose to 19.7 percent in the first quarter, up 3.2 percentage points from the previous quarter, the central bank said in a statement on its website, citing a recent survey.

The PBOC carried out the quarterly survey among 20,000 urban bank depositors in 50 major cities.

Nearly 63 percent of urban bank depositors polled said current consumer prices are "too high to accept," down 5.9 percentage points from the fourth quarter last year.

China's consumer price index, a main gauge of inflation, eased to a 20-month low of 3.2 percent last month.

Many Chinese are expecting inflation to slow in the short-term, with the "future price expectations sub-index" dropping to 62.1 percent, down 3.3 percentage points from the previous quarter.

About 31 percent of respondents said they believe prices will increase in the coming quarter, down 5.4 percentage points from the fourth quarter.

Taking current prices, interest rates and income levels into account, 82.5 percent of urban residents said they prefer depositing more money in banks, with the willingness to "consume more" rising to 17.5 percent.

As for investment options, according to the survey, "funds and other wealth management products" were a top priority for more than one-fourth of respondents, followed by "industrial investment" for 16.4 percent.

Only 14.1 percent of respondents said they would be willing to buy homes in the second quarter, nearly the same number as in the fourth quarter and also the lowest since the fourth quarter of 1999, when the quarterly survey began. Meanwhile, only 9.4 percent of Beijing and Shanghai residents said they are willing to invest in the real estate sector in the coming quarter.

The survey results came after Premier Wen Jiabao said last week that China's property prices remain far from reasonable, urging local governments to sustain efforts to regulate the sector.

The government has introduced a slew of measures to curb runaway property prices over the past year, including restrictions on second-home purchases, raising down payment requirements and introducing property taxes.

In February, new home prices in 45 out of 70 major cities monitored by the government fell from the previous month, according to the National Bureau of Statistics.

In a quarterly PBOC survey of 5,000 Chinese entrepreneurs, their confidence rebounded in the first quarter after falling for four consecutive quarters.

The entrepreneur confidence index, a gauge of the views and opinions of the country's entrepreneurs, rose to 70.2 percent in the first quarter, up 1.8 percentage points from the fourth quarter.

About 27.3 percent said the nation's economy is "relatively cool," up 2.5 percentage points from the previous quarter.

Nearly 67 percent of respondents indicated no change in the economy, nearly the same number as in the fourth quarter, while only 5.6 percent said the economy is "relatively hot".

Meanwhile, a sub-index tracking entrepreneurs' views of the country's current economic performance stood at 39.2 percent, staying below the good-bad gauge of 50 percent for a third straight quarter and declining 2.5 percentage points from the previous quarter.

Chinese authorities are targeting a 7.5-percent increase in this year's gross domestic product, slower from the 9.2-percent growth recorded in 2011.

The survey also showed that raw material costs fell in the first quarter, as the raw materials purchase sub-index and the production materials price sub-index dropped by 1 percentage point and 1.1 percentage points from the previous quarter, respectively, to hit 67.3 percent and 67.5 percent.