Today, data from the National Bureau of Statistics showed that the CPI (National Consumer Price Index) rose 2.8% year-on-year in September, at the highest level in a year, up 0.3% month-on-month. PPI (National Industrial Producer Ex-factory Price Index ) continues to be in the downward range, up 0.9% year-on-year and down 0.1% month-on-month.
Industry insiders predict that overall prices will be moderate in the future, PPI will enter the deflation range, and my country's inflationary pressure may begin to weaken.
9 September CPI's year-on-year increase has expanded, mainly driven by the price of "pigs and vegetables",
data shows that the CPI in September changed from a month-on-month decrease of 0.1% to a month-on-month increase of 0.3%; it rose 2.8% year-on-year, an increase of 0.3% from the previous month, at the highest level in a year, but weaker than market expectations.
Some institutions have expected that the year-on-year increase in CPI in September may expand. According to statistics, the average forecast of the year-on-year CPI increase of 13 institutions is 3%.
Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, said that prices rose in September, but continued to be within 3.0%. Mainly driven by the expansion of the price increase of "pig and vegetables", the short-term supply of pork seasonal consumption and local extreme climate impacts disturbed the two.
Specifically, among the year-on-year CPI increase, food prices rose by 8.8%, with the greatest pulling effect, affecting CPI rise by about 1.56 percentage points. Among food prices, prices in all categories, including pork, fresh fruits, fresh vegetables, cooking oil, etc., have risen, among which pork prices have risen the most significantly, up 36.0%, an increase of 13.6% over the previous month.
Judging from the 0.3% month-on-month increase of CPI, food prices rose by 1.9%, affecting the CPI increase by about 0.35 percentage points.
"In terms of pork, due to the tight supply caused by the early production capacity sales, coupled with seasonal factors such as festivals, pork prices returned to the rising range, up 5.4% month-on-month in September. However, the central and local governments invested a total of 200,000 tons of pork reserves in September, ensuring the stable supply and price of live pig market. Overall, the increase in pork prices is significantly lower than the first wave of increase this spring and summer." Wen Bin, chief economist of China Minsheng Bank, said.
It is worth noting that among the non-food products with month-on-month increase in CPI, the prices of industrial consumer goods turned from a decrease of 0.7% last month to a flat price. Affected by the downward trend of international oil prices, domestic gasoline and diesel prices fell by 1.2% and 1.3% respectively; service prices turned from a flat price last month to a flat price to a downward trend of 0.1%.
Wen Bin analyzed that the price of refined oil rose first and then fell in September, and the decline was greater than the increase, which cooled down on inflation. Although the epidemic in the tourism area gradually converged in September, coupled with the impact of the Mid-Autumn Festival and National Day, service prices fell by 0.1% month-on-month, and the decline in cross-regional tourism demand dragged down the performance of the service industry.
According to calculations, the core CPI, excluding food and energy prices, rose 0.6% year-on-year, a decrease of 0.2 percentage points from the previous month, and continued to be at a significant low.
It is worth noting that from the structural perspective, the CPI in August showed the characteristics of "food continued to rise, energy accelerated to fall, and core inflation continued to be sluggish", and the CPI in September continued to follow this characteristic. Ding Yujia, a researcher at the Zhixin Investment Research Institute, said that the core CPI, excluding food and energy prices, remained the same month-on-month, and fell by 0.2 percentage points year-on-year to 0.6%, indicating that the weak economic recovery and the spread of the epidemic continue to suppress core inflation.
Wen Bin said that the core CPI rose 0.6% year-on-year in September, setting a record low in the non-epidemic period. From the reasons, rents fell by 0.2% month-on-month, and the downward trend of services and durable consumer goods on a month-on-month basis, resulting in a weak core CPI, which also reflects that the current insufficient domestic demand is still the main contradiction in the economy.
PPI continues to decline, and the input inflation pressure is alleviated. In September, the prices of commodities such as international crude oil continue to decline. Demand in some domestic industries rebounded, and the overall price trend of industrial products declined, but the downward trend slowed down.
data shows that PPI continues to decline year-on-year, up 0.9% year-on-year, down 1.4 percentage points from the previous month, lower than market expectations; it fell 0.1% month-on-month, up 1.1 percentage points from the previous month.
According to estimates, in the year-on-year increase of PPI in September, the tail-strike impact of price changes last year was about 1.3 percentage points, and the impact of new price increases was about -0.4 percentage points. Both declined compared to August.
Wen Bin said that in September, international commodities, crude oil and metal prices fell, domestically weakened due to external pressure transmission, and the pressure of input inflation was reduced. Coupled with the weak demand in some domestic industries and other factors such as changes in base, PPI continued to decline to 0.9% year-on-year in September.
"PPI slowed down year-on-year, which will help alleviate the investment costs of some mid- and downstream manufacturing industries, stimulate the vitality of micro-subjects, and promote employment and consumption. However, compared with the usual level, the prices of some raw materials are still relatively high, and with the fluctuations in the global foreign exchange market, some companies still face many challenges." Zhou Maohua said.
data shows that during the PPI year-on-year, the prices of means of production and means of living have increased, affecting the increase of PPI by about 0.49% and 0.41% respectively. Among the three specific sub-items of the prices of means of production, the prices of mining and raw materials industries rose in September, but the prices of processing industries fell by 1.9%. On the other hand, the price of means of production fell by 0.2% and the price of means of life rose by 0.1%.
Ding Yujia analyzed that the downward trend of production materials in PPI slowed down, and living materials rebounded slightly. Among them, the prices of the raw materials industry rebounded slightly, mainly driven by domestic demand-priced commodities; the prices of oil, gas and nonferrous metals priced by internationally priced continue to fluctuate and decline as overseas demand slows down, and the price drag on domestic related industries is still relatively large. As the impact of high temperature subsides and a series of stable growth policies have been implemented to achieve results, industrial production accelerated its recovery in September, and the demand side has improved significantly. The month-on-month decline in prices in industries such as ferrous metal processing, nonferrous processing, and non-metallic mineral products have narrowed.
Wen Bin told Cailianshe reporters that from the overall performance of the upstream and downstream of the industrial chain, the pressure of upstream price increases has basically been transmitted to the downstream in the early stage. As the pressure of external input inflation fell, the pressure of upstream and downstream price increases has been inverted, and the profit space of mid- and downstream has rebounded. This month, the purchase price of industrial producers fell by 0.5% month-on-month, which was also greater than that of PPI.
PPI-CPI Scissors Difference further widened
Cailianshe reporter found that the PPI-CPI scissors Difference widened in September to -1.9%, a new low since 2021. Previously, the PPI-CPI scissors difference in August was -0.2%, the first time it turned negative since 2021.
China Post Securities once predicted that PPI is expected to continue to decline under the influence of overseas economic recession background and the high base in the same period last year, and may turn negative in the fourth quarter. After the PPI-CPI scissors difference turns negative, it will further widen in the future, and the cost pressure of midstream and downstream enterprises will be further alleviated.
Oriental Jincheng pointed out that looking forward to the future, the core CPI growth rate will be at a significant low, and PPI is expected to continue its downward momentum year-on-year, and the foundation for stabilizing prices will be further consolidated. Therefore, there is little risk of a sharp rise in inflation before the end of the year, and macro policy will mainly focus on stabilizing growth.
Zhou Maohua expects that domestic consumption will recover due to seasonal factors, but domestic demand is generally recovering, and subsequent consumer prices are expected to fluctuate around 3.0%, and overall prices are moderate. However, domestic demand is in the recovery stage, grain harvests year by year, pig production capacity is in a reasonable range, and the supply of daily necessities for residents is sufficient. In addition, the overall price base rose in the fourth quarter of last year, prices remained moderate and controllable.
Ding Yujia expects that PPI may turn from negative to positive month-on-month in October, and PPI in October has turned from 1.3% to -1.2%, which is the largest decline this year, which will drag down PPI to continue to decline year-on-year.
Wen Bin told Cailianshe reporters that as the monetary policies of major economies continue to tighten, the future international commodity prices will change from the previous unilateral rise in to wide fluctuations, and the overall external inflation pressure faced by my country is reduced. At the same time, my country's inflation pressure will begin to weaken.
"In terms of CPI, with the effective effect of government frozen pork reserves and other regulatory measures, the room for further increase in the future will be reduced. Food prices will also face certain short-term fluctuations. Due to the high base last year, the possibility of the year-on-year growth rate of CPI in October and November has increased. In terms of PPI, the year-on-year growth rate brought about by the rise in the base last year in the fourth quarter has a strong year-on-year growth rate decline, and at the same time, the pressure of input inflation has weakened compared with the previous period. In addition, downstream demand is weak, it can basically be determined that PPI will enter the deflation range." Wen Bin said.
This article is from Cailianshe
