The International Monetary Fund said Wednesday that Chinese inflation should slow in the coming months after it picked up to a troubling 6.4 percent rate in June.

The pressures which forced prices upward fuelling social and political worries are now dissipating and government policy measures are "having an impact," the IMF said in a new report on the Chinese economy.

"Inflation has certainly become more of a social concern," IMF China mission chief Nigel Chalk said in a briefing for reporters on the report.

"But our view is inflation is close to peaking in the next month or two, and we believe that by the end of this year inflation will start moving onto a downward trend."

The IMF forecast inflation will be running at 4.0 percent by the end of the year, but that GDP growth will continue at a fast 9.5 percent pace through this year and next.

"We continue to see China as a bright spot in global growth," Chalk said, while warning that the country's undervalued currency remains a barrier to much-needed financial sector reforms.

The Fund's report said that it did not see a dangerous nationwide property bubble -- though there were bubble-like conditions in certain metropolitan areas like Shenzhen.

But it added that, despite some effective government interventions to cool property price rises, the conditions remained for a dangerous bubble to materialize

"As as long as the cost of financing is low and other investment options are sparse, the propensity for property bubbles will remain," it said.

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