China's inflation grew at its fastest pace in 21 months while industrial production and other key economic indices continued to slow, paving the way for policy fine-tuning to support growth.

Some analysts said rebounding consumer prices may have peaked, and overall economic growth was largely in line with that anticipated by Chinese authorities.

The Consumer Price Index, the main gauge of inflation, accelerated 3.3 percent from a year earlier last month, the National Bureau of Statistics said yesterday.

That compared with an increase of 2.9 percent in June and 3.1 percent in May. In the first seven months, the inflation index gained 2.7 percent year on year, still below the yearly target of 3 percent set by the central bank.

Extreme weather

"The dramatic rebound of the CPI was a natural result of extreme weather, serious drought and floods taking place in recent months which boosted food prices," said Li Maoyu, an analyst at Changjiang Securities Co.

"The 3.3 percent expansion may be the highest of the year, and we don't think there will be any interest rate increase in the current quarter."

Food costs, which account for a third of the CPI basket, rose 6.8 percent from a year earlier in July, while prices in the non-food sector advanced just 1.6 percent.

The Producer Price Index, the factory-gate measure of inflation, rose 4.8 percent on an annual basis last month. The rate was 1.6 percentage points less than that in June, another sign that the slowdown in production costs will spill over to the CPI in later months.

China's moderating economy has triggered concerns of excessivepolicymeasures to curb overheating.

The National Association of Financial Market Institutional Investors said in a report last Friday that China may fine-tune its policy stance back to a supportive one in the third quarter and even reduce the reserve requirement ratio, the share of deposits a bank must set aside as reserves, to free more capital.

Property market

China's gross domestic product increased 10.3 percent from a year earlier in the second quarter, down from the surge of 11.9 percent in the first three months after the government determined to cool the property market, reduce energyconsumption, revamp economic structure and control local government financing.

The State Information Center, a unit under the National Development and Reform Commission, China's top economic planner, forecast the growth may further slow to 9.2 percent in the third quarter.

Wang Qing, a Morgan Stanley economist, said China's economy had managed a soft landing, but the speed of slowdown was faster than he had estimated. His agency has modified the growth forecast for this year to 10 percent from 11 percent.

"There may be a visible softening in policy tone in the third quarter," Wang said. He also predicted there would be no interest rate rise this year.

• industrial [in´dʌstriəl] a.工业的，产业的 (初中英语单词)
• bureau [´bjuərəu] n.局；编辑部；事务所 (初中英语单词)
• yesterday [´jestədi] n.&ad.昨天；前不久 (初中英语单词)
• extreme [ik´stri:m] a.尽头的 n.极端 (初中英语单词)
• dramatic [drə´mætik] a.戏剧的；戏剧般的 (初中英语单词)
• account [ə´kaunt] vi.说明 vt.认为 n.帐目 (初中英语单词)
• advanced [əd´vɑ:nst] a.先进的；高级的 (初中英语单词)
• measure [´meʒə] n.量度；范围 vt.测量 (初中英语单词)
• annual [´ænjuəl] a.每年的 n.年刊 (初中英语单词)
• percentage [pə´sentidʒ] n.百分数；比例；部分 (初中英语单词)
• economy [i´kɔnəmi] n.经济；机制；组织 (初中英语单词)
• financial [fi´nænʃəl] a.金融的，财政的 (初中英语单词)
• domestic [də´mestik] a.家庭的；本国的 (初中英语单词)
• energy [´enədʒi] n.活力，精力；能力 (初中英语单词)
• structure [´strʌktʃə] n.结构，构造；组织 (初中英语单词)
• reform [ri´fɔ:m] v.&n.改革；改良；革除 (初中英语单词)
• agency [´eidʒənsi] n.代理商；机构；代理 (初中英语单词)
• visible [´vizəbəl] a.可见的；明显的 (初中英语单词)
• paving [´peiviŋ] n.铺砌；铺面 (高中英语单词)
• consumer [kən´sju:mə] n.消费者；用户 (高中英语单词)
• expansion [ik´spænʃən] n.扩大；膨胀；发展 (高中英语单词)
• producer [prə´dju:sə] n.生产者；演出人 (高中英语单词)
• excessive [ik´sesiv] a.过分的；极端的 (高中英语单词)
• requirement [ri´kwaiəmənt] n.需要(的东西)；要求 (高中英语单词)
• consumption [kən´sʌmpʃən] n.消耗；结核病 (高中英语单词)
• commission [kə´miʃən] n.委任(状) vt.委任 (高中英语单词)
• policy [´pɔlisi] n.政策；权谋；保险单 (英语四级单词)
• statistics [stə´tistiks] n.统计学；统计 (英语四级单词)
• yearly [´jiəli] a.每年的；一年间的 (英语四级单词)
• drought [draut] n.旱灾；干旱 (英语四级单词)
• economist [i´kɔnəmist] n.经济学家；节俭的人 (英语四级单词)
• taking [´teikiŋ] a.迷人的 n.捕获物 (英语六级单词)
• forecast [´fɔ:kɑ:st] vt.&n.预测；预报 (英语六级单词)
• landing [´lændiŋ] n.登陆；降落；楼梯平台 (英语六级单词)