CPI in March was 1.5% year-on-year, up 0.6 percentage points from February; PPI rose 8.3% year-on-year in March, down 0.5 percentage points from February. The year-on-year difference between PPI and CPI in March was 6.8%, down 1.1 percentage points from February, falling for five consecutive months. It can also be seen that the inflation situation is mainly dominated by PPI.
CPI in March was 0.0% month on month, of which food was - 1.2%, down 2.6 percentage points from the previous month, mainly due to the seasonal fluctuation of food prices; In March, the price of pork in CPI was - 9.3% month on month, and the price of poultry was - 4.9% month on month. This year's CPI will be much lower than the target value of 3% year-on-year, and our forecast value is at the level of 1.5-2%. On the whole, it shows a trend of low in the front and high in the back; PPI is also falling year-on-year, so inflation will no longer be a problem in 2022, and steady growth is the main problem in 2022.
From a year-on-year perspective, the fall in PPI prices began to narrow, the upstream prices rose while the middle and lower reaches continued to fall, and the price trends between the upstream and the middle and lower reaches diverged again; From the month on month perspective, PPI prices have resumed rising for two consecutive months, and the more upstream, the greater the increase.
The global energy crisis caused by the conflict between Russia and Ukraine has had a huge impact on the energy prices in the global market, especially in the European market. As a result, the economy of the euro area has also been impacted and will fall into the dilemma of stagflation; The US economy is at a cyclical high, with a high rate of energy self-sufficiency and little impact from the conflict between Russia and Ukraine. Therefore, the Federal Reserve intends to accelerate the pace of interest rate hike and table contraction.
Although the inflationary pressures faced by China and the United States are quite different, China mainly maintains growth, the United States mainly suppresses inflation, and the monetary policy cycle of China and the United States is also in the opposite direction. However, due to the current strong labor market in the United States, the Federal Reserve is confident that the implementation of a more radical monetary tightening policy will inevitably have an impact on China's loose monetary policy, which is mainly reflected through the impact of international capital flows and the market linkage of the United States, Hong Kong and the mainland. Therefore, from an international perspective, high inflation will still restrict steady growth.
