The July consumer price index number, the main gauge of inflation in the country, will give the government more freedom to loosen credit to spur the slowing economy, China Daily reported. It was the slowest rate of growth since February 2010, the bureau said.
Year-on-year inflation grew 2.2 percent in June, 3 percent in May and 3.4 percent in April. In the first six months of 2012, the CPI climbed 3.3 percent compared with the same period of last year.
Slowing of food prices has largely been credited for the improvement. Food prices account for nearly one-third in calculating China's CPI.
China is facing lackluster external demand and the government's efforts to cool inflation have slowed gross domestic product growth. In the first quarter, GDP growth fell to a nearly 3-year low of 8.1 percent.
Zhang Liqun, a researcher with the Chinese Cabinet's Development Research Center, told China Daily abundant domestic agricultural production helped stabilize prices. He called for more attention to the severe drought in the United States, which would affect China's edible oil and grain prices.