Event: in March, CPI rose 0.6 percentage points year-on-year to 1.5%, and the market expectation was 1.3%, 0% month on month; PPI was 8.3% year-on-year, 8.8% of the previous value, 8.1% of the market expectation and 1.1% month on month.
CPI non food items kept rising, while the decline of food items narrowed and fell seasonally month on month, but the range was slow. The year-on-year growth rate of core CPI was flat, fell slightly, the price of service items fell, and the price of industrial consumer goods rose. Epidemic development and prevention and control policies in some cities have been tightened, offline travel and consumption have been significantly limited, and online consumption has also slowed down due to logistics obstacles.
Pork has not yet started the upward cycle, vegetable prices have gone up seasonally, and grain and edible oil prices have risen slightly. After the Spring Festival, the demand for pork fell, and the offline catering consumption in some areas was affected. The epidemic has brought some interference to the slaughter and transportation of pigs at the supply side, but the total supply has not been substantially affected. In March, the pork price center continued to decline, and the speed of capacity removal in the industry was slow. The fourth round of collection and storage was started in early April, but with the improvement of the epidemic situation and the repair of logistics transportation, the supply increased periodically, and there is still the possibility of suppressing pig prices. Affected by the epidemic, vegetable transportation was blocked and prices rose year-on-year. The conflict between Russia and Ukraine has led to the rise of global soybean and wheat prices, and the prices of grain and edible oil in China have also increased slightly.
Among non food items, vehicle fuel continued to rise due to the transmission of overseas oil prices, family services and tourism fell month on month, and maintained an upward trend under the action of the year-on-year base. Affected by the epidemic, the recruitment of enterprises did not usher in a significant seasonal rise, and the prices of air tickets and tourism fell.
PPI imported inflation pressure continued, and energy prices rose significantly. With the repeated conflicts between Russia and Ukraine and the intensification of European and American sanctions, overseas commodity prices continued to rise in March, with increased volatility. Under the influence of sanctions, energy prices are expected to remain high. The prices of crude oil, natural gas, coal, nonferrous metals, Shenzhen Agricultural Products Group Co.Ltd(000061) etc. all rose. China's fuel and diesel prices also rose passively.
Steel and cement prices rose slowly, and the price rise in the middle and lower reaches of PPI was under pressure. Under the steady growth policy, with the marginal improvement of construction in March compared with that in February, infrastructure construction will drive the increase in demand of steel and cement industries. However, the Chinese epidemic has a certain impact on Construction in some regions, and the price is up month on month, but the upward range is moderate. The epidemic has a certain impact on supply chain production. Under the weak consumption will of residents and employment pressure, it is difficult for the prices of middle and lower reaches industries to rise.
The downward trend and range of PPI are more disturbed by the inflation of overseas imports. At present, the price of global industrial products rebounds. Under the influence of geopolitics, the price of energy rises and the fluctuation intensifies. Under China's steady growth policy, the demand for ferrous and non-ferrous metals has increased, and the prices have also increased. The epidemic prevention and control has disturbed the supply chain, and the prices of some industrial products have also increased. The decline of PPI will be affected, but it will remain downward under the action of raising the tail last year.
Led by pork prices, CPI was generally mild in the first half of the year, and China's inflation pressure was relatively small compared with overseas pressure. There is still the possibility of further downward exploration of pig prices. The CPI trend in the first half of the year was moderate and did not affect the direction of the central bank's monetary policy. Residents' consumption is expected to be relatively weak under the epidemic and employment pressure. The price rise is mainly borne by downstream enterprises. Policies also give more structural support to manufacturing and small and medium-sized enterprises. Under steady growth, more policies are expected to be issued to escort the economy.
