The epidemic pushed CPI to rise more than expected. In March, CPI rose by 1.5%, an increase of 0.6 percentage points over the previous month. There are two main reasons why the year-on-year increase of CPI in this period exceeded market expectations. First, since March, the epidemic prevention and control measures in many places have been tightened, and the rising demand for goods and insufficient supply have led to a higher rise in food prices than seasonal. Since March, many places have implemented sealing and control measures, which has triggered the demand of residents to hoard materials. On the other hand, the road transportation is blocked and the logistics link is not smooth, resulting in a shortage of material supply. With each passing day, we can see that the price of 28 key vegetables in March was significantly higher than that in previous years. Second, geopolitical conflicts continued, pushing up energy prices and some Shenzhen Agricultural Products Group Co.Ltd(000061) prices. Affected by the situation in Russia and Ukraine, the international crude oil price fluctuated at a high level. In addition, both Russia and Ukraine are major grain exporters. In March, international wheat, corn and soybean prices rose, driving up China’s Shenzhen Agricultural Products Group Co.Ltd(000061) prices. It should be noted that behind the higher than expected CPI in this period is the differentiation of price structure. Under the influence of the closure and control of the epidemic, contact and social consumption were restrained. The core CPI in this period is the same as that in the previous period, indicating that the weak demand of residents has not been improved.
Imported inflation, superimposed on the power of infrastructure, PPI rose month on month. In terms of imported inflation, the prices of Petrochina Company Limited(601857) , nonferrous metals and other related industries continued to rise, affecting the rise of PPI by about 0.77 percentage points, accounting for 70% of the total increase. Infrastructure investment has gradually developed, and the price of building materials has warmed up. Price differentiation of downstream consumer goods. Overall, the survival of downstream enterprises is still poor in the case of rising raw material prices in the middle and upper reaches.
Under the containment of the epidemic and structural inflation, rescue policies need to be introduced urgently. Under the policy of sealing and controlling epidemic areas, structural inflation directly affects the “money bag” of residents. Because of Omicron virus ba As of April 11, there were 18 high-risk areas and 244 low-risk areas in China. As mentioned above, the closure and control management will lead to the behavior of residents hoarding materials. In addition, the war between Russia and Ukraine will promote the rise of some Shenzhen Agricultural Products Group Co.Ltd(000061) prices, and the food price will probably continue to rise beyond the season. On the other hand, the epidemic prevention and control has impacted the production of enterprises, which has a negative impact on Residents’ income. Epidemic prevention and control and logistics obstruction put pressure on the production of some enterprises. According to the first financial report, several listed companies said that the relevant work in the place where the epidemic occurred was affected to some extent, and the epidemic control measures may even lead to the shutdown of some companies’ factories. The decline in corporate revenue may be transmitted to employees, squeezing personal and family income. For enterprises, the policy should formulate compensation measures for damaged market entities in epidemic control, such as tax reduction and fee reduction, house rent reduction, and encourage financial institutions to actively carry out various financial support measures to maintain the cash flow of enterprises. For residents, on the basis of paying close attention to guarantee and supply, provide subsidies to low – and middle-income people, such as issuing consumption vouchers, consumption subsidies and other forms, so as to promote the recovery of consumption.
Risk factors: vaccine failure caused by epidemic variation; China’s policy exceeded expectations.
