In January, CPI rose 0.9% year-on-year, compared with the previous value of 1.5%; PPI rose 9.1% year-on-year, with the previous value of 10.3%. The growth rate both fell, and the scissors gap narrowed.
The year-on-year growth rate of CPI fell in January. In January, CPI rose by 0.9% year-on-year, compared with the previous value of 1.5%. Among them, food prices fell by 3.8% and non food prices rose by 2.0%. Both food and non food items fell compared with the previous month. On a month on month basis, the CPI rose by 0.4% in January, of which food prices rose by 1.4% and non food prices rose by 0.2%. Core CPI rose 1.2% year-on-year, the same as last month. Overall, the year-on-year decline of CPI in January is related to the early spring festival this year, with a high base in the same period last year. On the other hand, the fall of CPI in January is also related to the continued downward position of pork prices. However, with the “secondary early warning” of pig grain price ratio, which triggered the start of collection and storage policy, and the decline of leading indicators to breed sows, the price is expected to rise in the future.
Non food items: CPI transportation and communication increased by 5.2% year-on-year and 1.1% month on month, which was driven by CPI year-on-year and CPI month on month. It was mainly caused by the rise in the price of fuel for transportation vehicles, which was related to the increase in travel costs during the Spring Festival transportation superimposed by the rise in oil prices. In January, the prices of air tickets, vehicle rental fees and long-distance buses increased by 12.4%, 9.8% and 5.2% respectively. CPI residential items increased by 1.4% year-on-year, unchanged month on month. CPI education and entertainment items increased by 2.9% year-on-year and 0.2% month on month, mainly affected by film consumption in festival factors. Overall, the rise in energy prices has a certain pull on the chain ratio of CPI non food items, especially the recent rise in crude oil prices.
Food items: in January, CPI pork fell by 41.6%, dragging down CPI by 0.96% year-on-year, the largest drag on CPI; The demand for pickled products ended in winter, the overall pork consumption entered the off-season, and the CPI pork decreased by 2.5% month on month. Affected by seasonality, CPI fresh fruit rose 7.2% month on month in January. The supply of vegetables is generally sufficient. Although the Spring Festival is the peak consumption season, the CPI of fresh vegetables increased by only 3.1% month on month, significantly lower than the 19% increase in the same period last year, with a year-on-year decrease of 4.1%, driving the CPI down by 0.1%.
PPI continues to decline. In January, PPI rose 9.1% year-on-year, with the previous value of 10.3%; PPI decreased by 0.2% month on month, and the year-on-year growth rate decreased slightly, and the decline was significantly narrowed. Among them, the price of means of production increased by 11.8% year-on-year, driving PPI up by 8.85% year-on-year and down by 0.2% month on month,; The price of means of living rose by 0.8%, driving PPI to rise by 0.2%, unchanged month on month. In the PPI sub item month on month, affected by the promotion of the policy of ensuring supply and stabilizing price, the prices of coal and steel continued to fall, but the oil price rose, offsetting the impact of the fall in the prices of steel and coal. Therefore, the month on month decline of PPI narrowed in January.
The probability of CPI breaking 3% in the second half of the year is not low. On the one hand, the steady growth force, the increase of residents’ income, the weakening impact of the local epidemic, the rise of Consumption Willingness, and there is room for the rebound of CPI non food items. On the other hand, CPI food items also have room to rise under the background of pig destocking. Generally speaking, the probability of CPI breaking 3% in the second half of the year is not low.
Risk warning: imported inflation pressure; The household savings rate remains high; Live pigs make up inventory, etc.
