What does the price index trend change mean
Our reporter Xiong Li
Since the beginning of this year, domestic prices have continued to diverge.
According to data released by the National Bureau of Statistics, the producer price index (PPI) of industrial producers rose by 1.7% year-on-year in February, and the consumer price index (CPI) fell by 0.2% year-on-year. The "scissors gap" between the two has widened from January.
As an economic indicator that reflects the price changes in production and consumption in a certain period, why does the "scissors gap" between PPI and CPI widen?
What does the differentiation of the two trends mean?
CPI and PPI trend differentiation
Since the beginning of this year, the CPI has been operating in a negative range for two consecutive months.
Judging from the data in February, the CPI fell by 0.2% year-on-year, and the rate of decline narrowed by 0.1 percentage point from the previous month.
Among them, food prices changed from a 1.6% increase last month to a 0.2% decrease, which affected the CPI drop by about 0.05 percentage points.
Tang Jianwei, the chief researcher of the Bank of Communications Financial Research Center, said that due to the high base of pork prices at the beginning of last year, pork prices fell 14.9% year-on-year in February this year, a significant increase of 11 percentage points from the previous month.
The pulling effect of pork prices on the CPI year-on-year was -0.4%, which was an important reason for the decline in food prices.
The year-on-year increase in PPI continued to expand on the basis of a positive change in January.
It rose by 1.7% year-on-year in February, an increase of 1.4 percentage points from the previous month.
From a month-on-month perspective, the PPI rose by 0.8%, and has been on an upward trend for 9 consecutive months.
Affected by the continued upward trend of international crude oil prices, prices in domestic petroleum-related industries continue to rise; as domestic demand rises, coupled with the continued rise in international metal commodity prices, the domestic ferrous metal mining and processing industry, ferrous metal smelting and rolling processing industry, and non-ferrous metals The prices of smelting and rolling processing industries rose by 5.9%, 2.3% and 1.5% respectively.
"Theoretically speaking, the trend of changes in PPI and CPI should be basically synchronized. PPI represents more the production sector, and CPI represents the consumer sector. Price increases in the production sector usually also cause price increases in the consumer sector. But from recent data Look, the "scissors gap" between PPI and CPI is expanding, and there is an out-of-sync situation." Wen Bin, chief researcher of China Minsheng Bank, said that on the one hand, the rise in commodity prices is the main reason for the accelerated recovery of PPI.
On the other hand, the year-on-year increase in the price of food with a higher weight in the CPI has dropped significantly, especially the price of pork has dropped significantly, leading to the current negative growth of the CPI.
Wen Bin believes that the CPI trend will still be affected by the structure in the next stage.
The economic recovery of the United States and other major economies in the world is likely to accelerate. Increased demand may drive the price of bulk commodities to continue to rise. Since March last year, my country’s PPI has declined significantly. It is expected that bulk commodity price increases and the base effect will continue to promote the rise of PPI.
What is the impact of the expansion of the "scissors gap"
Wang Jun, chief economist of Zhongyuan Bank and member of the Academic Committee of the China International Economic Exchange Center, believes that the main reason for the expansion of the "scissors gap" is the uneven economic recovery.
The acceleration of the PPI's upward trend is affected by many factors. From the perspective of domestic factors, the steady economic recovery, especially the resilience of real estate investment, has led to the rise of upstream raw material prices; from the perspective of international factors, economic recovery and inflation expectations are rising, and global re-inflation transactions are gradually heating up. .
The prices of bulk commodities represented by crude oil and non-ferrous metals have continued to rise. This has not only expanded China's external demand through import channels, but also increased the enthusiasm of the domestic commodity market through financial channels. The two jointly promoted imported price increases.
"The year-on-year increase in CPI shows signs of gradual stabilization at the bottom, but as a whole it does not have the basis for a sharp and rapid rise. The rapid recovery of investment and industry, and the slower recovery of consumption and service industries are important reasons for the expansion of the'scissors gap'. It will be strengthened in the first half of the year.” Wang Jun said, but from the perspective of the upstream and downstream transmission mechanisms and their respective influence mechanisms, inflation pressures in the short term and throughout the year are relatively limited, so there is no need to worry too much about the risk of a recurrence of inflation.
What impact will the deviation of PPI and CPI have on economic operations?
Wen Bin believes that the expansion of the "scissors gap" reflects that the foundation for the current recovery of total social demand is not yet solid.
In the case of fierce competition in the downstream industry, it is difficult for upstream raw material prices to be transmitted through prices, which may result in the "scissors gap" between PPI and CPI, and the "knife edge" may also expand, which will affect downstream production companies. The operation brings certain difficulties and pressures.
Therefore, maintaining policy stability and continuity and focusing on stabilizing and expanding aggregate demand is a top priority.
Prices will remain moderate throughout the year
Regarding the annual price trend, Guo Liyan, director of the Market and Price Research Institute of the China Macroeconomic Research Institute, believes that in the later period, CPI is expected to return to the moderate growth range, showing a "low before the end and then stable" situation during the year, with a slight increase throughout the year; PPI may increase year-on-year Continue to expand and reach a relatively high point in the middle of the year. However, domestic industrial products have sufficient production capacity and supply, and smooth market circulation. There will be no continuous sharp rise. It is expected that the situation will be "low at both ends and high in the middle" within the year, and it is generally within a reasonable range.
Tang Jianwei believes that although the CPI is at a low level, the new price increase factors have increased significantly since the beginning of the year, indicating that demand is improving.
The economic recovery is superimposed on the rise of tail-raising factors, and the CPI will rise to a positive value year-on-year, and the PPI will increase further.
Overall this year, prices will run at a moderate level.
Although my country's annual price trend is expected to be moderate, experts also reminded that the expansion of the "scissors gap" between CPI and PPI means that the economic recovery of various domestic sectors is not synchronized, and the global economic recovery is not synchronized.
"The divergence of the two will increase the difficulty and complexity of macro-control to a certain extent." Wang Jun said.
In terms of policy response, Wang Jun suggested that, on the one hand, we should pay close attention to the impact of global economic recovery and re-inflation transactions on China’s price trends, closely track and effectively manage the imported risk of inflation this year, and prevent individuals, companies and even the market from affecting inflation. The expectations of continuous strengthening and self-realization of inflation.
On the other hand, the continuous changes in internal and external demand put forward new requirements for macroeconomic policies. It is necessary to balance short-term fluctuations and long-term development with cross-cyclical control to solve structural and long-term problems in the process of economic development.
Wen Bin believes that it is still too early for the Fed to tighten monetary policy by raising interest rates. However, if the economy recovers strongly in the second half of the year and inflation continues to be high, it is not ruled out that reducing the scale of debt purchases will have a tightening effect, which will cause global financial markets. Violent fluctuations.
my country's macroeconomic policies must pay close attention to inflation trends at home and abroad, and be prepared for new shocks.