Xinhua All Media+CPI's year-on-year shift from decline to rise releases a signal of economic recovery - interpreting August price data | year-on-year | month

Xinhua News Agency, Beijing, September 9th (Xinhua) - The year-on-year shift of CPI from decline to rise releases a signal of economic recovery - Interpretation of August price data

Xinhua News Agency reporters Wei Yukun and Liu Jinhui

According to data released by the National Bureau of Statistics on the 9th, in August, the national consumer price index decreased by 0.3% year-on-year from the previous month to an increase of 0.1%; The month on month increase was 0.3%, an increase of 0.1 percentage points from the previous month. The year-on-year increase in prices has turned positive, releasing a signal of economic recovery.

"In August, the consumer market continued to recover, and the supply-demand relationship continued to improve. The month on month increase in CPI slightly expanded, and the year-on-year increase turned from a decrease to an increase," said Dong Lijuan, Chief Statistician of the City Department of the National Bureau of Statistics.

In China's CPI basket of goods, food accounts for a relatively high proportion. Statistics show that in August, food prices decreased by 1.7% year-on-year, the same as last month; The month on month decrease of 1% has turned to an increase of 0.5%.

According to Dong Lijuan's analysis, in August, due to factors such as extreme weather in some regions affecting transportation, farmers being reluctant to sell, and central reserve pork collection and storage supporting market confidence, pork prices increased by 11.4% compared to the previous month, which remained unchanged; The egg production rate of laying hens in summer has decreased, coupled with an increase in consumer demand towards the start of school and Mid Autumn Festival. As a result, egg prices have increased by 8.3% compared to the previous month, with a decrease of 0.9% compared to the previous month; The supply of fresh fruits is sufficient, and prices have decreased by 4.4% month on month, which is 0.7 percentage points narrower than the previous month.

Pork prices account for a high proportion of food prices. Regarding the future trend of pork prices, Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, stated that it is expected that the overall supply and demand of pork in China will be balanced in the second half of the year, and both supply and demand will increase seasonally. The overall trend of pork prices may show a seasonal rebound.

August is the summer season, and service consumption such as tourism and hotel accommodation continues to recover. Statistics show that service prices increased by 1.3% year-on-year in August, an increase of 0.1 percentage points compared to the previous month; The month on month increase was 0.1%, with hotel accommodation and tourism prices rising by 1.8% and 1.4% respectively.

According to estimates, in August, the core CPI, excluding food and energy prices, increased by 0.8% year-on-year. "Since the beginning of this year, the year-on-year increase in China's core CPI has been fluctuating in the range of about 1%, indicating that although there is some differentiation in the structure of consumer prices among Chinese residents, they have remained stable overall," said Wang Likun, Deputy Researcher at the Market Economy Research Institute of the Development Research Center of the State Council.

Industry insiders analyze that as an important indicator of macroeconomic operation, CPI has shifted from a decrease to an increase year-on-year, indicating that China's policy effects continue to emerge, the economic cycle continues to flow smoothly, the supply and demand relationship has significantly improved, and the driving force for economic recovery has increased.

The Ministry of Commerce and other departments have successively introduced multiple policies to promote consumption in key areas such as home furnishings and automobiles; Hunan has issued 20 measures to restore and expand consumption, and Beijing has issued a new batch of "Jingcai Green" consumption vouchers with a total scale of over 100 million yuan; Key e-commerce platforms such as Meituan Maicai timely increase the supply of seasonal fresh food in response to changes in market demand, allocate manpower according to regional consumer market conditions, and meet the immediate delivery needs of citizens... Recently, all parties have made efforts from both supply and demand sides to promote the recovery of consumer demand and ensure the stable operation of prices.

"In the next stage, as the economy recovers and market demand continues to expand, the supply-demand relationship is expected to gradually improve. In addition, the impact of the high base in the same period last year is gradually eliminated, and the year-on-year increase in CPI will gradually return to a reasonable level." said Fu Linghui, spokesperson for the National Bureau of Statistics.

The CPI is improving, and the national industrial producer price index continues to operate in a positive trend. In August, due to factors such as improved demand for some industrial products and rising international crude oil prices, PPI decreased by 3% year-on-year, with a decrease of 1.4 percentage points narrower than the previous month; The month on month decrease from 0.2% last month has turned to an increase of 0.2%, marking the first time this year that it has turned positive.

Specifically, in August, affected by the rise in international crude oil prices, the domestic oil and gas extraction industry saw a month on month increase of 5.6% in prices, while the oil, coal, and other fuel processing industry saw a month on month increase of 5.4% in prices. The demand in the metal related industry has improved, with prices in the non-ferrous metal smelting and rolling processing industry rising by 0.4% month on month, and prices in the black metal smelting and rolling processing industry rising by 0.1% month on month.

Wang Likun stated that from the perspective of the price trend of major commodities, energy and black metal prices may remain at their current levels in the second half of the year due to insufficient global demand. However, the prices of these two types of commodities showed a downward trend in the same period last year, indicating a gradual decrease in year-on-year base. It is expected that the year-on-year decline in PPI in the second half of the year will continue to narrow, and the revenue of manufacturing enterprises in the middle and lower reaches will continue to improve. Industrial operations are expected to maintain overall stability.

The recent economic data released by relevant departments has sent more positive signals. In August, the Purchasing Managers Index of China's manufacturing industry rose to 49.7%, the China Commodity Index rose to 102.7%, and the China E-commerce Logistics Index rose to 111.1 points, indicating a clear upward trend in the economy. The scale of futures trading has maintained a growth trend, with the transaction volume and volume of the national futures market increasing by 47.76% and 23.49% year-on-year in August, respectively.

KPMG's "China Economic Observer" report for the third quarter of 2023 is optimistic about the growth prospects of the Chinese economy, pointing out that the driving force of consumption on the economy will continue to strengthen, and innovation momentum will continue to empower economic growth. The Chinese economy is expected to achieve a growth rate of 5.5% in 2023.

"Overall, despite facing pressure and challenges, there are many favorable conditions for sustained economic recovery and support for high-quality development. The economy is expected to maintain stable operation in the second half of the year, and the quality of development will continue to improve," said Fu Linghui.