The consumer price index (CPI), a barometer of inflation, grew 6.2 percent in August from a year ago, 0.3 percentage points down from July, said the National Bureau of Statistics (NBS). The figure was still well above the government-set target of 4 percent for the year.

The biggest driver of the CPI was still food prices, up 13.4 percent in August over the same month last year. Pork prices, in particular, skyrocketed 45.5 percent. Residential costs climbed 5.5 percent, down 0.4 percentage points from July.

The producer price index (PPI), an effective gauge of inflation at the wholesale level, rose 7.3 percent year on year in August, compared with 7.5 percent in the previous month, said the NBS.

Zuo Xiaolei, chief economist with the Beijing-based China Galaxy Securities Co. Ltd., struck a note of caution. "Despite a modest drop in August, China consumer inflation is likely to rebound in the remainder of the year as growing PPI translates into CPI," she said.

"The government is less likely to further tighten the monetary stance given financial difficulties of smaller businesses," said Zuo.

The People's Bank of China, the central bank, raised interest rates three times and the reserve requirement ratio six times this year.

"But it's too early to call for monetary easing because the government learnt big lessons from the extremely loose monetary policies it implemented in 2009 and 2010," said Lu Ting, a Hong Kong-based economist with the Bank of America Merrill Lynch.