Affected by the pig's own cycle and African swine plague, a large number of live pigs were culled. The price of Chinese pork surged 46.7% in August. The "ferocious" pork price has completely overshadowed the rise in the price of fresh vegetables and fruits, leading to a steady increase of CPI in August, hitting nearly a year and a half high last month. If pork prices continue to be high in the future, it is not ruled out that CPI will break through 3% in the fourth quarter.
However, the downward pressure on non-food prices and the further expansion of the year-on-year decline in PPI in August all indicate insufficient demand in the real economy. Compared with previous inflation cycles, which were mainly driven by excessive demand and monetary expansion, only pork prices led to higher food prices, while prices of other goods and services generally fell.
Although it will take some time for pork prices to fall, analysts believe that it is unlikely that CPI will increase by more than 3% in the whole year. Moreover, from the macro-policy point of view, the price rise caused by single commodity supply should not be the interference factor of the dominant macro-policy. What we should pay more attention to now is the insufficient aggregate demand, so we should still pay attention to it. The countercyclical adjustment should be moderately strengthened to avoid the rapid decline of real economy growth.
China's National Bureau of Statistics announced Tuesday that the consumer price index (CPI) rose 2.8% year-on-year in August, higher than the 2.6% median estimated in Reuters'survey, consistent with the 17-month high hit last month. Among them, food prices rose by 10% and non-food prices by 1.1%.
According to the National Bureau of Statistics, the industrial producer factory price index (PPI) fell 0.8% in August from a year earlier, the biggest decline since August 2016 (and then 0.8%) and the median forecast of the Reuters survey dropped 0.9%. PPI fell 0.3% last month, the first negative in three years.
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