BEIJING - The decline in Chinese industrial firms' profits accelerated in July, adding to pressures on policy makers already striving to stabilize growth.

Profits of China's major industrial firms fell 2.9 percent year on year in July, sharply down from the 0.3 percent decline posted in June, the National Bureau of Statistics (NBS) said on Friday.

The NBS attributed the poor performance to weak domestic demand and a continuous fall in factory gate prices, which have suffered 41 consecutive months of declines.

Profits at industrial companies with annual revenues of more than 20 million yuan ($3.1 million) totaled 471.6 billion yuan in July.

During the first seven months, industrial profits dropped one percent from a year earlier, compared with a fall of 0.7 percent registered in the first half of the year, the NBS said.

The weakness in industrial profit growth may further lower entrepreneur confidence, curb manufacturing investment and have negative implications for companies' cash flow and government tax revenue, experts said.

To lower corporate funding costs and bolster economic growth, the central bank announced on Tuesday it will cut benchmark interest rates, the fifth cut since November, and lowered the amount of cash banks need to set aside.

The easing monetary policy is taking effect, with companies' interest payments shrinking 3.1 percent year on year in July, the NBS said.

Despite overall weakness, the high-tech manufacturing and consumer goods sectors posted strong profit gains, which rose 8.4 percent and 7.5 percent year on year, respectively, it said. Enditem