What is the reason? What is the future trend?, July CPI year-on-year decline month on month | decline | Wen Bin | decrease | pork | CPI | CPI year-on-year | price
On the 9th, the National Bureau of Statistics released the national consumer price data for July. With the continuous recovery of consumer demand, the CPI has turned from a decrease to an increase compared to the previous year. However, due to the high base in the same period last year, it has turned from flat to lower compared to the same period last year.
The trend chart of CPI rise and fall.
How is the CPI trend in July
From a year-on-year perspective, the CPI in July turned negative for the first time since February 2021, with a decrease of 0.3% compared to the previous month.
"Affected by last year's significant increase in base, food prices in July fell from a 2.3% increase in the previous month to a 1.7% decrease, which is the main reason why the year-on-year CPI fell into a negative range in July." said Wen Bin, Chief Economist of China Minsheng Bank.
According to Dong Lijuan, Chief Statistician of the Urban Department of the National Bureau of Statistics, the price of pork in food has decreased by 26.0%, an increase of 18.8 percentage points from last month; The price of fresh vegetables has decreased by 1.5% from a 10.8% increase in the previous month; The prices of eggs, beef, mutton, and shrimp and crabs have decreased by 1.5% -4.8%, with the decline expanding; The prices of fresh fruits, potatoes, and poultry have risen between 2.2% and 8.8%, with all gains falling back
"According to calculations, in the 0.3% year-on-year decline in CPI in July, the tail effect of price changes in the previous year was about 0, compared to 0.5 percentage points in the previous month; the new impact of price changes this year is about -0.3 percentage points, compared to -0.5 percentage points in the previous month." Dong Lijuan said.
The prices of fresh fruits and vegetables have decreased month on month
From a month on month perspective, in July, the CPI decreased by 0.2% from the previous month to an increase of 0.2%. Among them, food prices decreased by 1.0%, an increase of 0.5 percentage points from the previous month, affecting a decrease of approximately 0.18 percentage points in CPI.
"Food prices in July decreased by 1.0% month on month, significantly weaker than the historical month on month average of 0.3%, showing an off-season decline, mainly due to the decline in prices of fresh vegetables and eggs," Wen Bin said.
Dong Lijuan mentioned that in the food industry, seasonal fruits and vegetables are widely available, with prices of fresh fruits and vegetables decreasing by 5.1% and 1.9% respectively; The prices of eggs, edible oil, beef and mutton, and poultry have decreased by 0.4% -1.4%; The market supply is sufficient, and pork prices remain stable.
In Wen Bin's view, the price of pork in July first fell and then rose, mainly due to the short-term supply decline caused by the breeding side's reluctance to sell, resulting in a rebound in prices at the end of the month, ultimately leading to a month on month balance.
"After entering the fourth quarter, with the seasonal demand for meat rebounding and the effect of early capacity depletion gradually emerging, pork prices may stabilize at the bottom and wait to rise," Wen Bin believes.
Expert: year-on-year or recovery of positive growth in CPI in the fourth quarter
From the monthly year-on-year trend of CPI, it can be seen that in recent months, the year-on-year CPI has continued to operate at a low level. Fu Linghui, spokesperson for the National Bureau of Statistics and Director of the Department of Comprehensive Statistics of the National Economy, recently pointed out that overall, the low level of CPI growth is the result of multiple factors both domestically and internationally, and it is a phased process.
Wen Bin also believes that the CPI in July decreased by 0.3% year-on-year, although it fell into the negative range, the overall price situation is not pessimistic. Considering the rebound in international commodity prices, the recent short-term rebound in pork prices, and the expected gradual recovery of core inflation, it is highly likely that both CPI and PPI growth rates will rebound in the future. The bottom of this round of price trends can be basically confirmed.
In the view of Wang Qing, Chief Macro Analyst of Oriental Jincheng, the year-on-year CPI in the third quarter may briefly enter a negative growth range. However, against the backdrop of promoting consumption policies in the second half of the year, the core CPI is expected to steadily increase, and the overall CPI in the fourth quarter will also return to positive growth year-on-year.
