In the first seven months, the country's PPI dropped by 1.6 percent year-on-year, the data showed.

Wu Xiaoqiu, president of the Financial and Securities Institute of Renmin University of China, said the CPI and PPI figures showed that China's economic growth is relatively stable and will continue to see a steady upward trend.

Faced with great downward pressure, the government has adopted a raft of pro-growth measures, including stepping up construction of affordable housing, infrastructure building and encouraging private investment.

China's economy expanded by 7.4 percent in the first half, but the growth rate accelerated slightly to 7.5 percent in the second quarter from 7.4 percent in the first. The pace was generally in line with the government's full-year target of around 7.5 percent.

"Food price rises are the major contributor to the July consumer price increase, and a slight month-on-month rise in CPI indicates improved economic activity last month," Wu said. The July CPI was up by 0.1 percent on a month-on-month basis.

He forecast that the CPI will stay at around 2.5 percent without any large fluctuations in the second half of 2014 and that there will not be great pressure for reaching the target of holding CPI at about 3.5 percent.

Guan Qingyou, senior analyst at Minsheng Securities' research institute, said inflation pressure would grow in the final quarter to around 3 percent by the end of this year, as food prices may go up due to short pork supply and severe droughts in some regions.

In the latter half, the government is not likely to loosen up on its monetary policy, Guan said.