Xinhua quoted analysts said China consumer prices will remain high in the third quarter with July inflation figure forecast to be between 6% to 6.7%.

Mr Lu Zhengwei analyst with the Industrial Bank said the consumer price index a main gauge of inflation will climb to 6.5%YoY in July after hitting a three year high of 6.4% in June. But this may not be the highest in the year.

Ministry of Commerce data shows that Mr Peng Wensheng analyst with China International Capital Corp expected the CPI to retreat moderately to 6.3% in July as pork prices, the major cause of inflation over the past two months have started falling and prices of some vegetables have dropped more than 10% since the middle of July.

Expecting month-on-month increases of food prices, especially vegetable prices, to drop significantly, GF Securities said the YoY CPI in July will fall to 6%.

According to Mr Lu, the persistent high inflation will trigger another interest rate hike in August. He expected the economy to slow as industrial value-added output which measures the final results of industrial production may fall to 14.6% in July down from 15.1% in June.

Mr Lu said but the slower growth will help contain consumer prices in the fourth quarter.

July key economic indexes including CPI and industrial value added output are due to be released on August 9.

(Sourced from Xinhua)