The decline in pork prices led to a decline in the year-on-year increase of CPI
In January, CPI rose 0.9% year-on-year, down 0.6 percentage points from the previous month (1.5% last month), and the year-on-year increase fell. Among them, the urban rose by 1.1% and the rural rose by 0.4%; Food prices fell by 3.8% and non food prices rose by 2.0%; Consumer goods prices rose 0.4% and service prices rose 1.7%.
In January, CPI rose by 0.4% month on month (MOM), from decline to rise (from – 0.3% last month). Among them, 0.5% in urban areas and 0.3% in rural areas; The price of non food increased by 1.4% and 1.0%; Consumer goods prices rose 0.5% and service prices rose 0.3%.
The year-on-year decline in CPI was mainly affected by pork prices. Affected by the high base of last year, pork prices fell 41.6% year-on-year in January, driving the year-on-year decline of food prices by 3.8%, offsetting the rise in the prices of fresh fruits, aquatic products, edible oil and other foods. In terms of non food, affected by the rise in international energy prices, gasoline and diesel prices rose by 2.2% and 2.4% month on month, 20.7% and 22.7% year-on-year, respectively. Covid-19 epidemic spread in many places and the local Chinese new year have a suppressive effect on the service industry. However, due to the low base of last year and the insufficient supply before the Spring Festival, the prices of tourism and family services still rose to a certain extent year-on-year.
The policy of ensuring supply and stabilizing prices has achieved results, and energy prices have risen
In January, PPI rose 9.1% year-on-year, down 1.2 percentage points from the previous month; It fell by 0.2% month on month, 1.0 percentage points lower than that of the previous month.
Affected by the policy of guaranteed supply and stable price, the prices of coal and steel fell. The prices of coal mining and washing industry decreased by 3.5% month on month, and the prices of ferrous metal smelting and rolling processing industry decreased by 1.9% month on month; However, the year-on-year increase is still high, 51.3% and 19.8% respectively, which is still an important factor in the year-on-year increase of PPI.
In terms of energy, affected by the rise in international crude oil prices, Petrochina Company Limited(601857) and natural gas exploitation prices increased by 2.6% month on month, up from 6.9% in the previous month, with a year-on-year increase of 38.2%.
The narrowing of ppi-cpi scissors difference in the future is a deterministic trend
Looking ahead, we believe that the narrowing of ppi-cpi scissors will still be a deterministic trend. With the easing of the Russian Ukrainian crisis, it is expected that the further rise of crude oil prices is relatively limited. With the promotion of China’s “steady growth” policy, the supply of bulk commodities such as coal and steel is enhanced, and the pressure of price rise is expected to be alleviated. In February, PPI will still maintain a steady downward trend. On the other hand, the transmission from PPI to CPI price will continue. With the low rebound of pork price and the gradual increase of residents’ income, CPI will gradually enter the upward channel.
Risk tips
The effect of policy implementation was not as expected, the epidemic situation deteriorated, international relations deteriorated, and local debt risks erupted intensively.
