Consumer prices in China are likely to pick up towards the end of this year, according to the People's Bank of China. It also does not expect inflation or deflation to become a significant problem.

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China's consumer price index rose 0.7 percent year-on-year in March to hit an 18-month low. However, retail sales grew by more-than-expected 10.6 percent from last year.

The country has set a CPI target of around 3 percent for 2023.

Zou Lan, director of PBOC's monetary department said that in the medium to long term, China’s economy has no basis for an inflationary or deflationary trend. He claimed that’s because demand and supply in China’s economy are even, and monetary policy is “reasonable.”

This is a CNBC translation of his remarks in Mandarin.

Looking ahead, Zou said China’s monetary policy would be “targeted and effective” in order to support “stable growth.”

He also said that activity in the country's real estate sector has been encouraging, and warned against speculations in the industry.

Zou mentioned the Silicon Valley Bank fallout as a development that has increased attention on interest rate risks. Against that backdrop, he said China’s monetary policy would remain “stable.”

(With inputs from agencies)