A prolonged drought is plaguing five provinces along the middle and lower reaches of the Yangtze River, causing heavy economic losses.

Since early January, rainfall in Jiangsu, Anhui, Jiangxi, Hubei and Hunan provinces has been about 40 to 60 percent less than last year, said the Ministry of Civil Affairs.

The country's two largest fresh water lakes—Dongting Lake in Hunan Province and Poyang Lake in Jiangxi Province—have both seen their water level drop dramatically.

By May 29, more than 104.4 million mu (6.96 million hectares) of farmland had suffered from water shortages, said the State Flood Control and Drought Relief Headquarters.

In the five most disaster-stricken provinces, at least 34.83 million people were affected and the direct economic losses had topped 14.94 billion yuan ($2.3 billion) by May 27.

Meanwhile, the drought is pushing up food prices, re-igniting inflationary jitters across the nation. The average cabbage and cole prices during May 10-20 in 50 major cities soared 11.9 percent and 16.4 percent, respectively, from the previous 10 days, according to data from the National Bureau of Statistics.

As the disaster hit China's rice-growing areas, it may add fuel to the inflation worries, said Mao Changqing, a senior analyst with the CITIC Securities Co. Ltd.

Shen Jianguang, Greater China chief economist at Mizuho Securities Asia Ltd., expected China's inflation rate to exceed 6 percent in June as food price growth picks up pace.