China's consumer price index (CPI), a main gauge of inflation, rose 3.3 percent in July from a year earlier, the National Bureau of Statistics (NBS) announced on its website on Wednesday morning.

The figure was 0.4 percentage points higher than the 2.9% annual growth registered in June and 0.3 percentage points higher than the inflation target set by Premier Wen Jiabao during the country's top legislative meetings earlier this year.

A close look at the July figure shows that food prices rose 6.8 percent from a year earlier, while non-food prices were up 1.6 percent year-on-year, the NBS said.

On a monthly basis, the indicator in July was 0.4 percent up from the June figure.

According to Tang Jianwei, a senior macro-analyst at the Bank of Communications,  although consumer prices are likely to continue to rise in the short term, factors that lead to a drop in prices are likely to increase in the second half of this year and inflationary pressure will probably ease.

Many analysts interviewed by the EO agreed that the CPI likely peaked in July.

The producer price index (PPI), another measure of inflation at the wholesale level, rose 4.8 percent in July from a year earlier, the NBS said.

The PPI for July was 1.6 percentage points lower than the annual growth rate of 6.4% registered in June.

The statistics bureau also released statistics related to investment and consumption. Urban fixed-assets investment in the first seven months of 2010 reached 11.98 trillion yuan (1.44 rillion US dollars), up 24.9 percent year-on-year, but 0.6 percentage points down from the average rate of growth achieved over the first six months of the year.

Of that figure, investment in real estate reached 2.38 trillion yuan (287.6 billion US dollars), up 37.2 percent from a year earlier.

During the same period, retail sales of consumer goods nationwide reached 8.49 trillion yuan (1.02 trillion US dollars), up 18.2 percent from a year earlier.

The report also showed that the industrial value-added in large scale industry, including all state-owned enterprise and other industrial enterprises with yearly sales of more than 5 million yuan, was up by 13.4 percent in July year-on-year.

The People's Bank of China, the country's central bank, also released July's lending figures earlier today.

Yuan-denominated new loans issued in July totaled 532.8 billion yuan (64.3 billion US dollars), while yuan-denominated deposits increased by 160.9 billion yuan (19.4 billion US dollars) over the same period. 

Links and Sources:
The Economic Observer's Report (Chinese)
The NBS's Statement (Chinese)
The Central Bank's Statement (Chinese)