Institutions predict that CPI may continue to decline year-on-year in May or return to the "2 era"
Moderator Chen Wei: Economic and financial data for May will be released soon. As the domestic epidemic situation gradually improves, the resumption of production and production continues to progress, and the macro-policy counter-cyclical adjustment gradually increases, the industry generally predicts that the trend of new credit and new social financing in May will remain unchanged; fixed asset investment will increase The speed will stabilize and rebound; CPI will continue to decline, or return to the "2 era"; consumption continues to pick up, and the growth rate of total retail sales of social consumer goods will continue to rise month-on-month.
Our reporter Su Shiyu
On June 10, the National Bureau of Statistics will release data on the national consumer price index (CPI) and industrial producer ex-factory price index (PPI) in May. A reporter from Securities Daily found that as of now, 19 institutions such as CITIC Securities, China Merchants Securities, Shenwan Hongyuan, and Industrial Securities have predicted the CPI and PPI data for May.
Overall, the agency predicted that the minimum CPI growth rate for May in May was 2.4%, the maximum value was 4.8%, and the average growth rate was 2.9%; the minimum growth rate for PPI was -3.8%, and the maximum growth rate was 0.3%. The year-on-year growth was -2.8%.
Li Chao, chief economist of Zheshang Securities, told reporters of the "Securities Daily" that the May CPI will continue to decline year-on-year. High-frequency data shows that the overall price of food declined in May, with the prices of pork and fresh vegetables falling sharply and the prices of fresh fruits rising slightly. Higher fruit prices in the second quarter of last year have a certain impact on inflation. Apple and citrus may be a good harvest year this year, and the disturbance to inflation is expected to be small. As for non-food products, with the gradual advancement of the resumption of business and the resurgence of markets, the operation intensity of offline establishments has gradually resumed. The demand for dine-in meals and shopping in shopping malls has also picked up. The non-food category has been restored to the historical seasonal average.
Li Chao said that the CPI is expected to increase by 2.8% year-on-year in May, down 0.5% from the previous value, and the PPI will decline by 3.4% year-on-year, down by 0.3% from the previous value, and inflation will continue to decline. The hog cycle has peaked year-on-year, but pork prices are expected to stabilize in the second half of this year; the rise in crude oil prices has driven up the prices of industrial products, and the rapid advancement of infrastructure projects has also supported price repairs. PPI is expected to continue to improve in the future.
Hua Changchun, global chief economist of Guotai Junan Research Institute, said that whether it is the average price of 28 key monitored vegetables, or the price of various meats has fallen further. With the resumption of work and the resumption of the market, the future food prices will continue to fall. If domestic demand recovers slowly, catering consumption continues to be under pressure, meat consumption demand may be affected, and meat prices may continue to fall. For non-food prices, ups and downs diverged. The price of crude oil rebounded to a large extent, and the Keqiao Textile Price Index has declined for several weeks in a row. Taken together, it is expected that the CPI in May will further decrease to 2.8%, entering the "2 era".
In an interview with the Securities Daily, Xu Yang, chairman of Shanghai Mai Kerong Information Consulting Co., Ltd., said that the CPI may continue to fall in May, with a year-on-year increase of less than 3%, and a high probability of returning to the "2 era." Affected by the decline in pork prices, the year-on-year increase in food prices has narrowed significantly since May. At the same time, global oil prices rebounded in May, and prices of some domestic industrial products also rebounded, including rebar, copper, cement, and chemical products. According to a comprehensive analysis, the May CPI is expected to rise by 2.4% year-on-year, and the PPI will fall by 2.7% year-on-year.
In terms of monetary policy, Li Chao said that the impact of inflation on the central bank’s implementation of monetary policy is weakening, and the probability of a decline in the benchmark deposit rate will increase. In the future, there is still the possibility of a RRR cut and interest rate cut. By lowering the standard and superimposing the current lower interest rate of excess deposit reserve, the bank’s willingness to lend credit is maintained, the currency multiplier is maintained at a high level, and credit expansion is promoted. It is expected that the central bank will continue to focus on lowering the weighted interest rate of loans, mainly by lowering the MLF interest rate to guide the downward trend of LPR and lowering the benchmark interest rate of deposits.