In February, CPI food and non food had serious year-on-year differentiation, CPI industrial consumer goods prices rose, and inflation may appear in the future; PPI was higher than expected year-on-year, and the month on month ratio changed from decline to rise. Affected by the war between Russia and Ukraine, the decline of PPI in the second half of the year may be lower than expected. The ppi-cpi scissors gap fell in April, and the pressure on industrial enterprises to destock increased. Policies are needed to promote industrial enterprises to increase investment and production. Inflation is expected to be small, and there is still room for interest rate cuts.
Data
In February, CPI increased by 0.9% year-on-year, the same as that in January; On a month on month basis, CPI rose by 0.6%, an increase of 0.2 percentage points over the previous month, lower than the average of the past 10 years. By item, the CPI of non food increased by 2.1% year-on-year and 0.4% month on month, both of which expanded. CPI food prices fell by 3.9% year-on-year, an increase of 0.1 percentage points over the previous month
In February, PPI increased by 8.8% year-on-year, narrowed by 0.2 percentage points, slightly higher than expected; PPI rose by 0.5% month on month (MOM) from a decrease of 0.2% in January, of which PPI means of production changed from - 0.2% mom to 0.7%.
In February, ppi-cpi was 7.9% year-on-year, which has decreased for four consecutive months.
Key points
Affected by the Russian Ukrainian war, energy prices soared and the top was not established, driving the price rise of CPI industrial consumer goods.
Pork prices have entered the end of the cycle. The bottom shock has pulled down the year-on-year increase of CPI food. In the future, Shenzhen Agricultural Products Group Co.Ltd(000061) prices will rise, imported inflation will appear, and CPI food will turn from decline to rise. It is expected that the year-on-year CPI of the whole year will rise to 1.9% from 1.2% originally predicted.
The rise of commodity prices led to the rise of PPI. The possibility of escalation of the war between Russia and Ukraine still exists, and the impact on China's PPI continues. The decline of PPI in the second half of the year may be less than expected. Affected by the rise of overseas energy prices, it is necessary to be vigilant against the rise of commodity prices in China's black industry chain.
The ppi-cpi scissors gap was further narrowed. Under the environment of tightening global liquidity and the war between Russia and Ukraine this year, it is difficult to maintain high export growth. Policies are needed to promote industrial enterprises to increase investment and production. If the war continues, economic sanctions increase, the pressure of global economic stagflation rises, China's economy is under pressure, and there is still room for interest rate reduction.
Risk tips: international commodity prices fluctuated sharply, the Fed's monetary policy tightened unexpectedly, the epidemic got out of control again, and credit events broke out intensively.
