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Despite July's hikes, some experts say prices will slowly drop from August onwards, and China's CPI will still hover around 3 percent.
Professor Zhao Xijun, Renmin University of China said "There are two uncertainties for the CPI in the second half. One is grain output - summer grain production was affected by the flood this year, so autumn grain output will be important for the whole year's grain prices. If there's a good harvest in autumn, price pressure will be slight. Secondly, the global economic recovery is not that rapid now, so the need for raw materials is not very intense, and prices may not go up very quickly."
Wang Yuanhong, Official of State Information Center said "What we could predict now is that industrial output will continue to drop, and investment will also slow down, meanwhile growth rate for consumption may possibly decelerate. Under such circumstances, it's reasonable to say Producer Price Index will also decline."