The stabilization of prices in January is a good forecast for price stability throughout the year

2022-07-29 0 By

In January, the overall price level showed a steady but decreasing trend.On February 16, the National Bureau of Statistics (NBS) released CPI and PPI data for January.Data showed that the year-on-year CPI increase in January fell to the “1” range due to the continued downward impact of pork prices.At the same time, the price of coal, steel and other industries fell, driving the PPI to continue to fall.Experts said that the price trend in January has formed a good expectation for the stability of prices throughout the year, and prices will remain within a reasonable range throughout the year. CPI is likely to be low before and high after, and the overall increase will be moderate.PPI may be “high before low” trend.In January this year, the supply and demand of consumer markets remained basically stable, and prices were generally stable, as a result of the impact of the base number of consumer goods and the continued efforts made by all regions and departments to ensure supply and price stability of important commodities, such as strengthening the organization of supply, launching the launch of government-stored meat and vegetables, and strengthening price monitoring and early warning.On a month-on-month basis, the CPI rose 0.4 percent from a 0.3 percent decline last month.Among them, food prices increased 1.4% from a 0.6% drop in the previous month, contributing about 0.26 percentage points to the CPI increase.In food, the prices of fresh fruits, aquatic products and fresh vegetables rose by 7.2%, 4.1% and 3.1% respectively.Pork prices fell 2.5 percent.Year-on-year, the CPI rose 0.9 percent, down 0.6 percentage points from the previous month.Among them, food prices fell 3.8 percent, 2.6 percentage points more than in the previous month, affecting about 0.72 percentage points of the CPI decline.”Although the festive factors pushed up the prices of fresh fruits and vegetables by 7.2 percent and 3.1 percent month-on-month respectively, factors such as good weather and the guarantee of urban supplies during the Spring Festival kept the price increase of these foods lower than previous Spring Festival levels.In addition, pork prices fell 2.5 percent month-on-month, mainly due to the end of the winter marinating, pig market ahead of the festival accelerated.”Alcohol prices fell 0.6 percent month-on-month, significantly more than in previous years, which may be related to large previous increases and the impact of COVID-19 on consumption.”China Minsheng Banking Research Institute senior researcher Ying Xiwen told China Business Daily reporters.Of the 0.9 per cent year-on-year increase in January, the carry-over effect of last year’s price changes is estimated to be about 0.5 percentage points, while the impact of new price increases is estimated to be about 0.4 percentage points.Core CPI, which excludes food and energy prices, rose 1.2 per cent from a year earlier, the same pace as the previous month.”Core CPI excludes food and energy, which are highly volatile due to seasonal factors such as weather, holidays and international commodity prices.As a result, core CPI excluding food and energy has low volatility and is a better reflection of changing demand fundamentals in the domestic real economy.”Wu Chaoming, chief economist at Caixin Securities, told reporters, “The stable core CPI shows strong resilience in the domestic economy, stable demand changes and little inflationary pressure.”Industrial commodity prices continued to fall in January, driven by lower prices in coal, steel and other sectors.According to the itemized PPI data, the prices of domestically priced means of production generally fell in January, while the prices of food manufacturing, clothing, daily necessities and durable consumer goods generally rose.On a month-on-month basis, the PRODUCER price index fell 0.2 per cent, a decline of 1.0 percentage points from the previous month.Among them, the price of means of production fell 0.2 percent, 1.4 percentage points narrower than last month;The price of means of living was flat.We vigorously promoted the policy of ensuring supply and price stability, and the prices of coal and steel continued to fall. The prices of coal mining and washing fell by 3.5%, and those of ferrous metal smelting and rolling processing fell by 1.9%.On a year-on-year basis, the PPI rose 9.1 per cent, 1.2 percentage points slower than in the previous month.The prices of means of production rose by 11.8%, down 1.6 percentage points.The price of means of living rose 0.8 percent, down 0.2 percentage points.By industry, the price increase of coal mining and washing industry dropped by 15.5 percentage points year-on-year, which was the biggest decline among 40 industrial sectors.Of January’s 9.1 per cent year-on-year increase, the card-over effect of last year’s price changes was estimated at 9.3 percentage points, while the impact of new price increases was estimated at minus 0.2 percentage points.”First, under the influence of the policy of ensuring supply and stabilizing prices, the prices of means of production fell, and the increase was 1.6 percentage points lower than that of the same period last year. Therefore, the decline of new price factors is the main reason for the decline of PPI growth.Second, due to the slowdown of global economic recovery and the contraction of domestic demand, upstream raw material prices have fallen.Third, PPI growth turned from negative to positive in January last year, which also contributed to this year’s year-on-year slowdown.”The outlook for prices in 2022 is likely to remain within a reasonable range. A number of experts have analyzed that due to the gradual upward cycle of pork prices and the transmission of bulk commodity prices, the price increase may expand to some extent, but it will remain within a reasonable range.Wu chaoming predicted that CPI in 2022 is likely to show a trend of “low before high”, with a moderate increase for the whole year.PPI has the opposite trend, or a “high before and low after” trend.”The epidemic is still an important variable affecting future price trends.First, the evolution of the epidemic has affected the process of economic recovery, and has a greater impact on the prices of service and mid-stream industries, determining the slope of CPI rise.Second, the impact of the epidemic on the stability of the global supply chain will affect whether global demand can smoothly shift from goods to services and reduce the increase in commodity prices, which directly determines the downward slope of PPI.””China’s PPI is expected to decline from steep to slow in the future.From the downstream perspective, there is little upward pressure on CPI in the short term, mainly because supply is stable but demand needs to recover under the epidemic prevention and control.”In the medium term, however, CPI is expected to return to the 1 range as pork prices stabilize and demand gradually recovers.”Should be written in practice.”The new pig cycle is expected to start in the middle of this year.”Fan Ruoying, research institute of Bank of China, believes that pork prices are experiencing a bottoming and rebound stage, and pork prices will remain low in the first half of the year, and the year-on-year increase in the second half of the year will be overall higher.So, how should the policy level exert force in the future?Ying Xiwen believes that the CPI and PPI both fell in January, leaving some space for the price based monetary policy. However, MLF price was not adjusted in January, and the monetary and credit data exceeded expectations. Therefore, the policy should be mainly stable in February, but March will be a point worth paying attention to: on the one hand, we should pay attention to the domestic real economy and price performance;On the other hand, we need to pay attention to the impact of the Federal Reserve rate hike landing.”This year, we will continue to implement the policy of ensuring supply and price stability for commodities, encourage the government, producers and distributors to share costs, and increase support for downstream micro, small and medium-sized enterprises to further ease the pass-through pressure on commodity prices.”The State Council development research Center market economy research institute associate researcher Wang Likun said.’In the short term, stabilizing growth, improving demand and reversing expectations are the policy priorities,’ Mr. Wu said.It is expected that monetary policy is still in a period of easing, and monetary and credit easing is desirable, but we will use structural policy tools to achieve stable growth.Hebei: 2022 shantytown reform plan investment 43.6 billion yuan affordable rental housing plan investment 7.6 billion yuan qinhuangdao owners attention!There will be major changes to the rules for scoring traffic offences!