Consumers select goods at a supermarket in Hengshui City, north China's Hebei Province, April 8, 2017.
China's inflation rate will continue to rise in May due to the carryover effect despite lower food prices, according to a research note by the Bank of Communications.
The consumer price index (CPI), a main gauge of inflation, will increase 1.4-1.6 percent year on year in May, the research note said.
The projected growth will be faster than the 1.2-percent expansion registered in April and 0.9 percent in March.
The bank attributed the higher rate to stronger carryover effect, while predicting food price growth to slow markedly.
In the second half of the year, weaker demand and tighter currency liquidity will continue to weigh on consumer prices, but climbing labor costs and a shifting economic structure will lift the prices of services to offset the downward pressure, according to the research note.
China will release its official CPI data on June 9.