China's consumer price index (CPI) rose by a 33-month-high 5.6 percent in July on food price hikes, the National Bureau of Statistics (NBS) said on Monday.
The increase was higher than the four-to-five percent advance most institutions were expecting to see amid concerns of rising food prices.
The CPI increased 4.4 percent in June and 3.5 percent year on year in the first seven months of this year, said the NBS.
Food price jumped 15.4 percent over July last year. Grain prices rose 6.0 percent, meat and poultry 45.2 percent, and eggs 30.6 percent, said the NBS.
Foodstuffs have a weight of 33 percent in China's CPI, one of the key indicators of inflation, and meat, poultry and related products about 20 percent.
The CPI in the country's rural regions rose 6.3 percent. The growth was one percentage point higher than in urban areas.
Li Xiaochao, NBS spokesman, said that the rising international grain price and the rise in grain demand had driven up domestic grain prices, which, in turn, led to recent food price hikes.
"As industrial product prices and service prices remain relatively stable, the prices should not rise in an all-around and sharp way," Li said.
Yao Jingyuan, chief economist with the NBS, said the CPI would possibly rise in the following two months because of continuous food price hikes, the leading driver of inflation. He predicted the CPI would drop in the fourth quarter.
Construction material prices climbed 4.7 percent, with the cost of home rental jumping by 3.9 percent. The prices of water, electricity, and fuel also rose by 3.4 percent. And the service prices grew 1.6 percent.
Lu Zhongyuan, director of the Macroeconomic Research Institute of the Development Research Center of the State Council, said the continued economic boom and a good harvest of summer crops would offset the food price hikes and the CPI would fall steadily.
Liang Hong, chief economist with Goldman Sachs (Asia) China, predicted that China's CPI would see more than five-percent growth in July, if no firm monetary policies are taken.
But a report by the Bank of China said the central bank would not come up with more tightening measures in August as it takes time to see the effect of existing policies.