Li's statement has further raised the pressure for a possible rate hike.

Upside pressures on prices are significant due to rising labor costs, increasing international raw material prices and higher agricultural production costs caused by bad weather, said Li.

Li said curbing inflationary expectations was the main task facing by policymakers and the time was ripe for an increase in deposit rates, but he did not mention whether the central government will adopt for contractionary fiscal policy in recent.

China's CPI increased 2.8% year on year in April this year, according to statistics released by the National Bureau of Statistics. The CPI in urban areas rose 2.7% from a year earlier in April, while the CPI in rural areas increased 3.0%. Food prices went up 5.9% in April, while the price of clothing fell 1.3%.