According to the data of the National Bureau of statistics, in December 2021, CPI increased by 1.5% year-on-year and decreased by 0.3% month on month; PPI increased by 10.3% year-on-year and decreased by 1.2% month on month. The main concerns are as follows:
First, the fall in food prices narrowed the year-on-year increase in CPI. In December, CPI rose by 1.5% year-on-year, down 0.8 percentage points from the previous month. The main reasons are: first, food prices have fallen more. In December, the food price increased by 1.6% from the previous month to decreased by 1.2%, affecting the CPI to decrease by about 0.22 percentage points. This is mainly because the government has taken many measures to ensure the supply of "cabbage", the supply of vegetables has recovered significantly compared with the previous month, and the year-on-year increase of fresh vegetable prices in December has fallen sharply by 20 percentage points compared with the previous month; Before the Spring Festival, the enthusiasm of pig slaughter was high, and the supply of pigs increased in the short term, which promoted the decline of pork price. In December, the year-on-year decline of pork price increased by 4 percentage points compared with the previous month. Second, the decline of crude oil prices led to the decline of non food prices. In December, transportation and communication prices decreased by 1.3% month on month, down 1.6 percentage points from the previous month. Third, the tail warping factor affects the clearing. The influence of tail warping factor in December was 0 percentage point, down 0.6 percentage point from the previous month.
Second, the policy of ensuring supply and stabilizing prices was effective, superimposed on the decline of international crude oil prices, and the year-on-year increase of PPI narrowed. In December, PPI rose by 10.3% year-on-year, down 2.6 percentage points from the previous month. The main reasons are as follows: first, China's policy of ensuring supply and price stability has been continuously promoted, the coal output and market supply have increased steadily, and the coal price has fallen further. In December, the average settlement price of thermal coal futures was 865.8 yuan / ton, down 17.1% month on month; The year-on-year increase in the prices of coal mining and washing industry decreased by 22 percentage points compared with the previous month. Second, as OPEC + continues to promote the production increase plan, the international crude oil supply constraints have been eased, and the crude oil price has fallen, driving the prices related to oil exploitation down. In December, the average settlement price of Brent crude oil futures was US $74.8/barrel, down 7.48% month on month; The year-on-year increase in the price of oil and gas exploitation industry decreased by 22.9 percentage points compared with the previous month. Third, the tail warping factor affects the clearing. The tail warping factor in December was 0 percentage point, a decrease of 1.2 percentage points compared with the previous month. The influence of tail warping factor was weakened, which directly reduced the year-on-year increase of PPI.
Third, it is expected that CPI growth will pick up and PPI growth will fall in 2022, and the annual inflation will be moderate and controllable. On the one hand, the increase of CPI will rise moderately, showing a trend of low in the first and high in the last year. A new round of "pig cycle" will start in mid-2022, and the relationship between pork supply and demand will change in the future. At the same time, the upstream price rise is gradually transmitted to the downstream. After the superposition of the electricity price reform, the power consumption cost of enterprises will rise, and the cost driven inflation pressure will rise. It is expected that CPI will remain low in the first half of 2022, and the increase will expand in the second half of 2022, with an annual increase of about 2.2%. On the other hand, the rise of PPI will fall from a high level, showing a trend of high before and low after the whole year. Affected by the slowdown of global economic recovery, the gradual easing of energy supply constraints, the adjustment of the monetary policy direction of the Federal Reserve and other factors, the driving force for the continuous rise of commodity prices has weakened. Further considering the tail raising factors, it is expected that the increase of PPI in 2022 will decrease quarter by quarter, and may turn to negative growth in the fourth quarter, with an annual increase of about 4%.
