Inflation woes to level out, analysts say

Analysts predict inflation will peak in the next few months before it levels out to a more moderate rate of increase in the second half of the year.

"The inflation rate will start decelerating in the second half of 2008 as the government's macro controls gradually take effect," Everbright Securities Co said in a report. "The continued global slowdown will also depress demand, helping to pull down prices," the report said.

Analysts with China International Capital Corp (CICC) were more optimistic, predicting the CPI will hit its highest point by May before it begins to slow down.