According to data published by the national statistical office on december 12, 2022, china's consumer price index (cpi) increased by 1. 8 per cent in comparison with that of november, an increase of 0. 2 percentage points over that of november and a decrease of 0. 7 per cent in industrial output prices, a decrease of 0. 6 percentage points from that of november. Throughout 2022, the national consumer price increased by 2. 0 per cent over the previous year。
Institutional analysis suggests that, despite the ultra-season fall in pork prices and the strain on service prices, the fall in the base figure during the same period of the previous year was driven by a marked decline in the cpi rate in december, which led to a weaker ppi ring in december, but by a narrow decline in the same year, supported by a fall in the base figure。
The chief economist of the china-china region, also linked to china, pang zhuang, suggested that inflation should remain moderate and manageable throughout 2023, with little chance of sustained and rapid inflation warming. In the context of the gradual return of the economy to a relatively normal balance of supply and demand and reasonable potential growth, where monetary policy remains the main task of consolidating the basis for economic recovery and stabilizing upward momentum, there is no need to overemphasize the repressive effect of inflation on monetary policy that does not exceed policy targets。
Increased cpi ratio
Data show an increase of 1. 8 per cent in the cpi in december and an increase of 0. 2 percentage points over the previous month. Of these, the price of food increased by 4. 8 per cent, an increase of 1. 1 percentage points over the previous month, affecting an increase of about 0. 87 percentage points in the cpi. Among food products, the price of pork rose by 22. 2 per cent, an increase of 12. 2 percentage points from the previous month; the price of potatoes and fresh fruit rose by 12. 7 per cent and 11. 0 per cent, respectively, and the increase increased。
Among non-food items, petrol and diesel prices rose by 10. 5 per cent and 11. 4 per cent, respectively, reflecting a fall; and air fares rose by 26. 7 per cent, an increase of 7. 8 percentage points. The core cpi, net of food and energy prices, recovered slightly, by 0. 7 per cent over the same period, an increase of 0. 1 percentage points over last month。
According to csi, the higher-than-anticipated fall in pork prices was the biggest drag on food items, with the average wholesale price falling by 13. 5 per cent in december, mainly affected by a marked weakening of consumer demand. The 8. 8 per cent increase in the value of vegetables in the ring, focused on 28, was largely seasonal. The rapid adjustment of the disease prevention and control policy and the rapid increase in the number of infections have had some impact on the increase in the core cpi during the month, but the subsequent core cpi will be restored。
According to china kings, the epidemic suppresses the release of super-supply pressures, the price of pigs is high, the ring is falling sharply, and the price of vegetables is falling again, and the base figure after the increase in 2022 is lower. In addition, the cost of such services as rent, domestic work and recreation will slow down。
With regard to the subsequent trend in pig prices, the chief economist of zhelicuan securities, li, argued that consumption under the beijing, guangzhou and chengdu parallels had begun to recover rapidly, that the recovery in demand for food and meals had been compounded by a year-end increase in the demand for pickles and enemas, that demand-side support for pig prices was expected to increase and that pork prices were expected to rebound。
Looking ahead to 2023, the vice-president of the institute indicated that the cpi increase was expected to increase significantly in january this year, with a likely return to above 2 per cent. On the one hand, the tailing factor contributes about 1. 4 percentage points. On the other hand, the increase in consumption demand during the spring season, compounded by the fact that most of the country's urban epidemic has already peaked, will boost consumption demand to some extent。
The chief economist of the china shipping fund, deng haiqing, analysed that domestic inflation could reverse the downward trend in 2023 with a “high recovery in consumption” and a low base for pork prices. However, unlike inflation in europe and the united states, china's economy is growing at a rate of recovery towards a potential economy, not overheating. Thus, the inflation situation in the country will be manageable as a whole in 2023。
Ppi narrows the drop
In december, the ppi ring was reduced by an increase in prices in the oil and related sectors; the same year the decline was narrowed by a lower comparison base during the same period of the previous year。
By comparison, ppi fell by 0. 7 per cent, a decrease of 0. 6 percentage points less than last month. The price of the means of production fell by 1. 4 per cent, a decrease of 0. 9 percentage points, while the price of the means of living rose by 1. 8 per cent, a decrease of 0. 2 percentage points。
The chief economist of the bnpw, wenbin, stated that the decline in the ppi in december 2022 had been markedly narrow, that international commodity prices had fallen each other, with a small rebound after low crude oil prices had stabilized, a better supply of and demand for natural gas than expected to lead to a fall in prices, and a small rebound in prices of major metals. Domestic industrial prices are generally weaker than international markets in the face of reduced import-type inflationary pressures and inadequate demand。
The chief macro analyst, wang qing, from the east, stated that despite the current and future period of ppi weakness, the price of both international crude oil and the absolute price of primary industrial raw materials such as coal and steel remained high. The regulatory layer is currently deploying the release of advanced capacity, and there is some scope for a later price。
Pompey predicts that the global price levels for major energy and metals will be around 10 per cent lower in 2023, adding to the gradual warming of effective domestic social demand, helping to maintain our ppi average increase at a low level of about 0. 5 per cent。
