Core view: according to our calculation, the CPI in March is expected to be 1.15% year-on-year; Throughout the year, the year-on-year CPI peaked in the third quarter, reaching an annual high of 2.69% in September, and will decline in the fourth quarter. The year-on-year average CPI of the whole year is about 1.80%.
CPI sub item: according to our calculation, although the weight of CPI food, tobacco and alcohol sub item has been reduced in this round of base period (20212025), it still exceeds 30%, which plays a decisive role in the trend of CPI. The weight of the four sub items of residence, education, culture and entertainment, transportation and communication and medical care exceeded 10%. In addition, since 2016, the impact of the sub item of food, tobacco and alcohol on CPI has exceeded the sum of the other seven sub items.
CPI prediction: we use high-frequency data to fit and predict the two sub items of food, tobacco and alcohol and transportation and communication. For other sub items, we can find the seasonal changes of these sub items and use the historical mean value of seasonal changes as the alternative value of prediction.
Marginal impact of pork on CPI: as the mid year of this year is likely to usher in the inflection point of pork price, pork price has an important impact on the trend of subsequent CPI. According to our calculation, the price of pork is expected to decline by 35.79% year-on-year in 2022, and the impact on CPI is about - 6.18%. The marginal impact of pork price on CPI is 0.17%, that is, a 1% increase (decrease) in pork price will cause a 0.17% increase (decrease) in CPI.
Risk warning: the uncertainty of epidemic situation is still high; Pork supply exceeded expectations; The impact of the conflict between Russia and Ukraine continued to ferment.