After more than three years, CPI growth has returned to below 1%
Domestic CPI rose 0.5% yoy in October and pork prices fell for the first time after 19 consecutive months of hike
On November 10, the National Bureau of Statistics released data showing that in October the national CPI (consumer price index) increased 0.5% year on year and the increase was 1.2 less. percentage points compared to that of September. This is also the first time that the CPI increase has returned to 1 year over year after 42 months. %the following.
Dong Lijuan, a senior statistician at the City Department of the National Bureau of Statistics, explained that the year-over-year increase decreased the most, mainly due to the higher comparison base over the same period last year, the of tail lift factors and the impact of pork prices from rising to falling.
In October, pork prices finally fell for the first time after rising for 19 consecutive months, down 2.8% year-on-year. Egg, chicken and duck meat prices also decreased by 18.3%, 13.2% and 6.5% year-on-year, respectively, and the rate of decline increased by 0.6, 4.1 and 1, respectively. , 8 percentage points.
Everbright Bank financial market analyst Zhou Maohua told Shell Finance reporter that trend-wise, CPI in October will rise 0.5% yoy to the lowest point of the year and will expects it to rebound slightly in November and December. The annual CPI will increase approximately 2.6% year on year.
“Mainly due to the gradual recovery in demand, seasonal factors have led to a certain degree of rebound in the prices of meat, fruit and vegetables, but considering the good conditions faced by domestic supply, the overall price will not fluctuate significantly” . Zhou Maohua analyzed.
After 19 consecutive months of hike, pork prices fell 2.8% year on year
In October, from a year-over-year perspective, CPI increased by 0.5%, 1.2 percentage points lower than in September; on a month-over-month perspective, the CPI fell 0.3%.
Zhou Maohua said the year-on-year increase in CPI fell below 1% in October, more than expected, mainly due to falling food prices driven by falling pork prices and with a high base effect. Non-food prices such as services rose and fell alternately and the overall price remained stable.
In October, pork prices fell for the first time after 19 consecutive months of increases, down 2.8%, while egg, chicken and duck prices fell 18.3%, respectively, 13, 2% and 6.5%.
In October, although the prices of fresh vegetables, beef and mutton increased by 16.7%, 7.0% and 3.6% year-on-year, respectively, growth rates all fell.
Fu Yifu, director of the Suning Institute of Financial Research’s Consumer Finance Research Center, told Shell Finance reporters that the price of pork on the market has soared in recent months, allowing many companies to see profit margins. A large number of new pig farms have entered the industry, and small and medium-sized retail investors and leading large-scale pig farms are also expanding. Competition between companies has become increasingly fierce, the supply of the entire live pig market is also increasing. In addition to the high price of pork in the previous period, the demand for pork in the market tends to decrease. Overall, the reduction in demand and the increase in supply are the main reasons for the recent decline in pork prices.
According to figures released by the Ministry of Commerce, during the week of October 26 to November 1, the wholesale price of pork was 39.26 yuan per kilogram, down 3.5% from the previous month. The wholesale price of pork has fallen below 40 yuan / kg again, the same as in mid-May this year. The price is similar.
However, Fu Yifu believes that in the short term, although the downward trend in pork prices will continue for a period of time, strong consumer demand for pork around the Spring Festival will cause meat prices to rise. of pork.
The prices of non-food products fluctuated little and remained stable. Among them, the prices of health care increased by 1.5%; the prices of education, culture and entertainment increased by 1.1%; transport and communication prices fell by 3.9%; petrol and diesel prices decreased by 17.4% and 19.1% respectively.
Analysis: CPI may rebound slightly in November and December
Industry veteran Wang Jianhui told Shell Finance reporter that the October CPI data carries a mixed message. Fortunately, important factors driving price growth, such as food prices showing a stable and controllable trend, supply concerns have been raised, logistics are relatively smooth, pork prices have fallen for the first time and the prices of fresh vegetables were certain. The degree of increase, but also the increase is decreasing, which makes food prices overall stable and price increases have lost the main motivation.
“Furthermore, the RMB exchange rate has rebounded significantly over the past five months, which has also held back the prices of imported commodities, such as crude oil, minerals, bulk goods, grains, etc., and provided a good environment. to stabilize prices, “Wang Jianhui said.
But Wang Jianhui also expressed concern: He believes the data also reflects that China’s economic activities are still weak and that prices are generally weaker without effective support on the demand side.
Looking ahead, Zhou Maohua told Shell Finance reporter that from a trend perspective, October CPI will rise 0.5% yoy to the lowest point of the year, but November and December will recover slightly and the annual CPI will increase by about 2.6% year on year.
PPI is still down 2.1%, domestic demand is slowly recovering
The National Bureau of Statistics also released the Ex-factory Price Index of Industrial Producers (PPI) at the same time. From a year-over-year perspective, the PPI fell again 2.1% in October, the same rate as in September.
Among them, the price of the means of production decreased by 2.7%, the price of the means of life fell by 0.5% and the rate of decline increased by 0.4%.
Among the main industries, the coal mining and washing industries had a more limited decline in prices, which fell by 2.0 percentage points and a drop of 5.5%; the gas production and supply industry, which shrank by 0.1 percentage points, and a drop of 5.4%.
The oil and natural gas mining industry, which fell by 30.4% and expanded by 4.2 percentage points; the oil, coal and other fuels industry declined by 18.5% and expanded by 1.6 percentage points.
Zhou Maohua analyzed that the PPI continued to decline year-over-year but remained unchanged from expectations. The October PPI was flat on a monthly basis and was inconsistent with the Purchasing Managers Index (PMI) prices of the main raw materials purchased and with the international prices of bulk commodities, which mainly reflected the drag in lower energy prices. .
“The PPI in the fourth quarter will remain negative on an annual basis, but the trend of marginal improvement is expected to continue, mainly because the domestic and foreign demand is still recovering, especially the political effect of the domestic support demand continues to be released. , domestic exports show resilience and business confidence continues to rise. “And the decline in US election uncertainty is good for international commodity prices. However, the global epidemic is out of control and the number of infections has not peaked. This has curbed global consumption and investment demand, and has also limited room for commodity prices to rise, “said Zhou Maohua.
In terms of full CPI and PPI indices, Zhou Maohua believes that domestic demand is still weak relative to supply, but total retail sales of consumer goods have grown positively for two consecutive months, indicating that domestic demand is still in slow recovery. The domestic economy still needs the support of a proactive fiscal and monetary policy to continue saving businesses and stimulating the vitality of micro-actors, but the accuracy and effectiveness of policies must be emphasized to avoid the after-effects of a excessive liquidity.
Beijing News reporter Pan Yichun