In December, the year-on-year growth rate of CPI dropped significantly due to the impact of food and energy prices, and the year-on-year growth rate of core CPI was flat. It maintained the previous view that China's inflation pressure was generally controllable in 2022, but we still need to pay attention to the impact of overseas monetary policy tightening beyond expectations, energy price fluctuations and Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuations with high dependence on China's imports; In December, PPI fell month on month under the policy of maintaining supply and price stability, especially the growth rate of energy, steel and nonferrous metals fell significantly; There is internal differentiation in the price of means of living, and pay attention to the price change trend of non essential consumer goods.
In December, CPI decreased by 0.3% month on month, with a year-on-year increase of 1.5%, core CPI increased by 1.2%, service prices increased by 1.5% and consumer goods prices increased by 1.5% year-on-year.
In terms of month on month comparison, in December, food prices increased by 2.4% from the previous month to decreased by 0.6%, affecting the decline of CPI by about 0.10 percentage points; non food prices changed from flat to decreased by 0.2%, affecting the decline of CPI by about 0.17 percentage points; From a year-on-year perspective, food prices increased by 1.6% from the previous month to a decrease of 1.2%, affecting the CPI decline by about 0.22 percentage points, non food prices increased by 2.1%, down 0.4 percentage points from the previous month, and affecting the CPI rise by about 1.69 percentage points.
Inflation is generally worry free, but volatility is still. In December, although many parts of the country were affected by the epidemic, the year-on-year growth rate of CPI still fell under the influence of food and energy prices, and the year-on-year growth rate of core CPI remained stable, indicating that China's inflation situation is generally controllable to a certain extent. Looking forward to 2022, we still need to pay attention to three aspects: first, the volatility of inflation, the international economic recovery situation in 2022 will still affect energy prices, and the volatility of China's food prices, especially the pig cycle, remains. Second, the potential impact of overseas monetary policy adjustment on the prospect of economic recovery and the change of supply and demand structure, In particular, the Fed's higher than expected interest rate increase and contraction may affect the global economic recovery. Third, China Shenzhen Agricultural Products Group Co.Ltd(000061) still depends on overseas imports to a certain extent. The month on month growth rate of CPI of staple grain and edible oil in November and December was slightly higher than the historical average for two consecutive months. It is necessary to pay attention to the possibility that products with high dependence on international trade may become an imported source of inflation in the future.
In December, PPI decreased by 1.2% month on month, with a year-on-year increase of 10.3%, and ppirm increased by 14.2%. In December, the prices of means of production decreased by 6.8% month on month in the mining industry, 1.7% in the raw material industry and 0.9% in the processing industry.
From a year-on-year perspective, 37 of the 40 industrial categories surveyed rose in prices, the same as last month. The main industries with the year-on-year growth rate falling include coal, oil and gas, steel and nonferrous metals. The year-on-year growth rate rising is mainly public utilities and food manufacturing.
Pay attention to the signs of decline on the demand side. In December, under the influence of policies such as ensuring supply and stabilizing price, the price of industrial raw materials fell significantly month on month. We maintain our previous expectations and believe that there is still room for PPI to rise month on month in 2022, but the year-on-year growth rate will gradually decline. It will remain high and volatile in the first half of the year, and the downward range will be more obvious in the second half of the year. In addition, we need to pay attention to two points. First, the more than expected hawkish monetary policy of the Federal Reserve may affect the prospect of global economic recovery, and then affect the international commodity supply and demand pattern, resulting in sharp fluctuations in international commodity prices. Second, China's means of living also showed a weakening trend month on month in December. We need to pay attention to the transmission process from PPI to CPI, The price performance of essential consumer goods and non essential goods may be significantly differentiated.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The impact of the global covid-19 epidemic has expanded.
