The rate of inflation has now been under the government's target of 4% for three consecutive months.
This comes just a day after China reported that its export and import growth had slowed, leading to fears of a slowdown in its economy.
"The bottom line here is that the focus very much now is on growth," Song Seng Wun of CIMB Research told the BBC.
"The slower pace of rise in consumer prices gives enough room to the central bank to step in and ease its policies further if it wants to."
Further slowdown? Rising consumer prices have been one of the biggest causes for concern for China's policy makers in recent times.
Continue reading the main storySong Seng Wun
CIMB Research
The rate of inflation hit a three-year high in July last year, with prices rising at an annual rate of 6.5%.
However, price growth has been moderating ever since, led by a
drop in food prices month-on-month, especially that of pork, a staple
of the Chinese diet.Pork prices rose by 5.2% in April from a year earlier, compared with 11.3% annual growth seen in March.
At the same time, the recent drop in oil prices has also helped keep consumer price growth in check.
Alistair Thornton, from IHS Global Insight in Beijing, said he expected the rate of inflation to slow further in the coming months.
"We think the inflation outlook for this year is benign," he said.
Too early? China has been trying to boost domestic demand in a bid to offset the fall in global demand for its exports.
Prompted by concerns of a slowdown in its economy, China's central bank has taken steps to ease its policies to boost demand at home.
It has cut the reserve ratio requirement for banks twice in the past few months. The cuts essentially mean that banks have more money available to lend to consumers, as they have to keep less of it in their reserves.
But domestic consumption has not picked up enough. Data released on Thursday showed that imports grew by just 0.3% in April from a year earlier, compared with 5.3% in March. MostREAD MORE
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