China annual inflation picks up to 2.7% in June

China's annual inflation accelerated to 2.7 percent in June, up from 2.1 percent in the previous month, official data showed on Tuesday. The consumer price index (CPI) figures from the National Bureau of Statistics (NBS) were higher than market expectations of 2.5 percent in a poll of 18 economists by Dow Jones Newswires. Food price increases hit 4.9 percent year-on-year in June and remained the main driving force of inflation last month, according to an NBS statement. In the first half of the year CPI, a main gauge of inflation, gained 2.4 percent from the same period last year, it said. China, the world's second-largest economy, has set its inflation target for 2013 at 3.5 percent, higher than last year's actual inflation rate of 2.6 percent. The Chinese economy grew only 7.8 percent in 2012, its slowest annual pace in 13 years. It expanded by an annualised 7.7 percent in the first three months of 2013. Analysts expect growth in the second quarter to further slow down on weak domestic and foreign demand, as well as Beijing's determination to carry out reforms to reduce the country's reliance on investment and exports. A purchasing managers' index for China by British bank HSBC, which tracks manufacturing activity in factories and is a closely watched gauge of the health of the economy, hit a nine-month low of 48.2 in June, indicating further contraction.