Inflation to further ease in July: economists

China's inflation is expected to further ease in July, thanks to low food prices, giving authorities more space to continually loosen policies, Chinese economists said.

Experts predicted that the consumer prices index, a main gauge of inflation, may drop to 1.7 percent in July, the lowest level in 30 months.

In order to support economic growth, the monetary policy may turn to "moderately easy" from the current "prudent" stance, with expected cuts for interest rates and the reserve requirement ratio in the third quarter, experts said.

Lian Pin, the chief economist with the Bank of Communications, said that if there are no new factors to increase prices in the third quarter, the CPI may be as low as 2 percent during the July-to-September period.

"The central bank may cut the benchmark interest rates again this quarter, while fiscal deposits may grow fast during these three months," said a report from China Securities Co Ltd.

Meanwhile, the economic growth rebound is expected to continue at a moderate pace, economists said.