Prices in 9 regions have dropped, and CPI in 31 provinces was released in May. The increase in CPI in 11 regions is lower than the year-on-year increase in the national CPI. | Expected | Shanghai | Price | National | Province | Increase | CPI
Recently, the National Bureau of Statistics released the Consumer Price Index for May 2023 in 31 provinces. According to China News Service, the CPI of 9 provinces decreased year-on-year in May. Among them, Shanghai and Jilin continue to rank among the top two in terms of decline.
The year-on-year increase in 11 regions is lower than that in the whole country
Nine cities including Shanghai saw a year-on-year decline
According to data from the National Bureau of Statistics, in May 2023, the national CPI decreased by 0.2% month on month and increased by 0.2% year-on-year. The year-on-year growth rate of CPI continued to be lower than market expectations, but stopped at "three consecutive declines".
![Prices in 9 regions have dropped, and CPI in 31 provinces was released in May. The increase in CPI in 11 regions is lower than the year-on-year increase in the national CPI. | Expected | Shanghai | Price | National | Province | Increase | CPI](https://a5qu.com/upload/images/d29af12194f3f23715668051bd8e8e08.jpg)
According to a review by China News Service, the CPI of 31 provinces in May showed a coexistence of year-on-year fluctuations. Among them, 22 provinces saw a year-on-year increase, 9 provinces saw a year-on-year decrease, and the number of provinces experiencing fluctuations increased by 4 and 2 respectively compared to the previous month. In terms of growth rate, 16 provinces saw an increase in growth rate, 13 provinces saw a decline in growth rate, and all 31 provinces saw a decline in growth rate last month.
Specifically, 13 provinces including Gansu, Hebei, Inner Mongolia, Hunan, Ningxia, Xinjiang, Jiangsu, Hainan, Qinghai, Heilongjiang, Shaanxi, Yunnan, Guangdong, etc. have seen higher growth rates than the national level and are all in the "0 era"; The growth rate of seven provinces, including Liaoning, Zhejiang, Beijing, Fujian, Jiangxi, Sichuan, and Hubei, is on par with the national level; The growth rate of 11 provinces including Anhui, Shandong, Shanxi, Guizhou, Henan, Chongqing, Tianjin, Xizang, Guangxi, Jilin, and Shanghai was lower than the national level, of which 9 provinces including Shanghai declined year on year, and the number of declining provinces increased by 2 from last month,
In addition, from the perspective of increase and decrease, the largest increase in Jilin was 0.5 percentage points, but CPI continued to decline year-on-year; Xinjiang, Guangdong, Hubei, Tianjin, Guangxi, Shanghai and other regions experienced the largest decline, all at 0.3 percentage points.
Wen Bin, Chief Economist of China Minsheng Bank, and others analyzed that the national CPI slightly rebounded year-on-year in May, which is in line with market expectations. Among them, food has experienced a seasonal decline but the month on month decline has narrowed, and energy is mainly kept low due to international price transmission. The fading of holiday factors has led to a decline in prices of service goods, while durable consumer goods remain weak. The core CPI recovery that the market expects still needs to wait.
![Prices in 9 regions have dropped, and CPI in 31 provinces was released in May. The increase in CPI in 11 regions is lower than the year-on-year increase in the national CPI. | Expected | Shanghai | Price | National | Province | Increase | CPI](https://a5qu.com/upload/images/03003da3011026e2b3d05711e89abba0.jpg)
How will the future CPI go?
Looking ahead to the next stage of price trends, Chen Xing, Chief Analyst of Caitong Macro, stated that since June, the month on month growth rate of fresh vegetable prices has changed from negative to positive, the decline in egg prices has narrowed, the increase in fresh fruit prices has slowed down, and the decline in pork prices has expanded. It is expected that the month on month growth rate of CPI will improve, while the year-on-year growth rate will remain stable and slightly increase.
Chief Macro Economist Gao Ruidong of Everbright Securities predicts that the current CPI is already in the bottom range, with limited downward space. In July, it may hit the bottom again due to the influence of the base, and then slightly rebound.
According to Gao Ruidong's analysis, with a high inventory of live pigs, it is expected that the rebound in pig prices will be limited in the second half of the year. Against the backdrop of overseas interest rate hikes and tightening financial conditions, the oil price center has shifted downwards. In addition, the increase in service prices is limited, and durable goods are being discounted for promotion.
![Prices in 9 regions have dropped, and CPI in 31 provinces was released in May. The increase in CPI in 11 regions is lower than the year-on-year increase in the national CPI. | Expected | Shanghai | Price | National | Province | Increase | CPI](https://a5qu.com/upload/images/4ff1aa78df0fd211b3132ba5f9e7a4fc.jpg)
The Guosheng Macro Bear Park team also believes that inflation will continue to bottom out in the next 1-2 months, and there is a possibility of CPI turning negative in July. The central CPI for the whole year of 2023 may decline to around 0.9%, compared to the previous expectation of around 1.0%.
On June 7th, Yi Gang, the President of the People's Bank of China, visited Shanghai to conduct research on financial support for the real economy and promoting high-quality development. He stated that with the recovery of consumer scenarios, household consumption is gradually increasing. The expansion of consumer spending by residents will translate into income for enterprises and workers, which in turn will drive more consumption. It is expected that the CPI will gradually rebound in the second half of the year, and by December, the year-on-year CPI will be above 1%.