China CPI may drop in May

Overall inflation might have slowed down in May with food prices dropping, and offsetting hikes in non-food prices.

But the China International Capital Corporation is still predicting that CPI will rise between 7.7 percent and 8.1 percent year-on-year for the month of May. The index jumped 8-and-a-half percent for April, from the a year ago, up from 8.3 percent in March, and not far from the 12-year-high of 8.7 percent posted for February.

Nevertheless, CICC does say it expects food prices to keep falling, on the back of rising supplies and a good expected harvests. It also says it's not expecting any new tightening measures from the government or higher fuel prices in the short run.