The mainland's leading inflation indicator, the retail price index (RPI), fell 3 per cent last month, continuing its downward trend and reflecting the sluggish demand. Xinhua news agency reported yesterday, quoting the State Statistical Bureau, that June's RPI was further down from a year-on-year fall of 2.7 per cent in May and 2.1 per cent in April. The latest figures showed that deflationary pressure in the mainland economy remained strong despite the government's efforts to boost spending, an economist at a Western bank said yesterday. He said the downward trend would probably continue towards the end of the year. RPI slipped into the negative territory in October. Last month's consumer price index (CPI), which includes more volatile service prices, fell 1.3 per cent year on year, worsening from a year-on-year decline of 1 per cent in May. In the first half of the year, RPI fell 2.1 per cent while CPI was down 0.3 per cent. Beijing has projected its RPI to rise about 3 per cent for the whole of this year. The continuous drop in prices would be bad news for Beijing which hopes to stimulate domestic demand to help boost economic growth to a target of 8 per cent this year. Economists said the falling prices also meant that mainland consumers had largely stayed out of shops because of uncertainties over job security. Beijing has vowed to sack millions of workers as part of its efforts to reform the moribund state-owned industries.