The base disturbance magnified the year-on-year growth of CPI. In November, CPI increased by 2.3% year-on-year, It was slightly lower than expected (2.5%) and increased by 0.8 percentage points compared with the previous period. Considering that the year-on-year growth rate of CPI in the base period decreased by 1.0 percentage points (from 0.5% in October to - 0.5% in November last year), the year-on-year growth rate of CPI in November this year was not large. In November, the month on month growth rate of CPI (0.4%) exceeded the month on month growth rate of PPI for the first time in 14 months (0.0%), indicating that the change range of inflation on the consumer side began to exceed that on the production side.
The pressure on food inflation is still noteworthy. Although the rise in inflation in November was mainly affected by the base effect, the rebound in food inflation pressure driven by pork prices is real in the long run. At present, the pig grain ratio has rebounded from 5.05 in September (a new low since May 2014) to 6.51 in November. Superimposed on the factors that the base effect is gradually weakened and the demand is picking up near the Spring Festival, we expect the pig cycle to rebound in the first quarter of 2022 and drive the food inflation to continue to rise.
The year-on-year and month on month growth of PPI fell. In November, the year-on-year growth rate of PPI decreased from 13.5% in the previous period to 12.9%, Slightly higher than expected (12.1%).
The new social finance was less than expected, and the growth rate of social finance was still at the bottom. In November, 2.61 trillion yuan of new social finance was added, higher than the same period last year (2.14 trillion yuan), but lower than expected (2.70 trillion yuan). The year-on-year increase in new social finance was mainly driven by government and corporate bond financing. In November, the stock of social finance rose to 311.9 trillion yuan, a year-on-year increase of 10.1%, and the growth rate is still at the bottom. The fine-tuning of the caliber at the policy level also confirmed that the bottom rebound of social finance growth can be expected.
Credit growth was lower than expected, residential housing loans stabilized, and corporate credit demand was weak. In November, RMB loans increased by 1.27 trillion yuan, lower than expected (1.56 trillion yuan), a year-on-year decrease of 160 billion yuan. In November, medium and long-term loans for residents increased by 582.1 billion yuan, a year-on-year increase of 77.2 billion yuan; medium and long-term loans for enterprises increased by 341.7 billion yuan, a year-on-year decrease of 247 billion yuan, and corporate credit demand was weak.
M2 growth rate dropped and M1 growth rate stabilized. In November, affected by the decline in the deposit scale of non bank financial institutions, M2 increased by 8.5% year-on-year, lower than the expectation (8.7%), down 0.2 percentage points compared with the previous period. In November, affected by the improvement of production and operation activities, M1 increased by 3.0% year-on-year, higher than the expectation (2.5%), up 0.2 percentage points compared with the previous period.
