China News Service, March 5 (Reporter Xie Yiguan) On March 5, the government work report once again established a control target for the annual consumer price (CPI) increase of about 3%.

　　"The year-on-year CPI growth target in 2022 will be controlled within 3%. Judging from the target setting in the past 10 years, there are 7 years with an average target of less than 3%. If the disturbance caused by the epidemic in 2020 is excluded, the target is set within 3.5%. The CPI has been set at a target of 3.0% for seven consecutive years. This also shows the intention of normalizing price increases." said Yang Chang, head of the policy group and chief analyst at the China-Thailand Securities Research Institute.

　　Data from the National Bureau of Statistics shows that in 2021, the CPI will increase by 0.9% over the previous year, completing the annual regulation target of about 3%.

Judging from the 2021 CPI annual trend, in the first half of the year, affected by the tail-raising factor, the CPI was once higher year-on-year. However, as the decline in pork prices continued to expand, the CPI has fallen for many consecutive months since June.

In October and November, driven by the sharp rise in the price of fresh vegetables, the year-on-year increase in the CPI expanded rapidly again.

CPI rise and fall chart.

from the National Bureau of Statistics

　　The year-on-year increase in CPI in 2021 is lower than in previous years. "On the one hand, pork prices will be at a low level in 2021 as a whole, which will lower the CPI. On the other hand, it is because the new crown pneumonia epidemic is scattered in local spots, and terminal consumption has not yet fully recovered. It affects consumer prices," said Liu Xuezhi, a senior researcher at the Bank of Communications Financial Research Center.

　　How will the year-on-year CPI increase in 2022 change?

Will it exceed the CPI increase in 2021?

　　"From a structural point of view, the CPI is mainly composed of food items and non-food items. The driving force of its rise can be roughly divided into the promotion of food prices and the transmission of non-food prices from upstream to downstream. The uncertainty of food prices is mainly It comes from when the new round of the pig cycle starts." Wen Bin, chief researcher of China Minsheng Bank, told China-News Financial reporter.

　　In Wen Bin's view, at present, the current pig cycle is in the stage of de-capacity, and the year-on-year growth rate of pork prices has been negative for 16 consecutive months, which is the main reason for dragging down the trend of CPI.

After June last year, the number of fertile sows showed a month-on-month downward trend. According to historical laws, the impact on the slaughter of live pigs is roughly 10 months behind. That is to say,

pork prices may enter a new round of increases in the second half

of this year .

The pork section in a large supermarket in Fengtai District, Beijing.

Photo by China News Service reporter Xie Yiguan

　　"The trend of non-food prices has a strong correlation with PPI, and the transmission of prices from upstream to downstream is largely affected by global imported inflation. At present, global inflation is still heating up." Wen Bin believes that this The round of global inflation is mainly due to supply constraints under the impact of the epidemic.

Geopolitical conflicts have led to a rapid increase in risk aversion in the market, and

the prices of commodities, led by energy, have begun to rise again

.

　　Wen Bin pointed out that China's inflation level is expected to remain in a controllable range under the control of domestic bulk commodity supply and price stabilization policies

, but there are still uncertainties in the future inflation trend

.

On the one hand, under the circumstance of high global inflation, my country faces the risk of imported inflation.

On the other hand, after the surge in commodity prices last year, the prices of natural gas, palm oil, crude oil, aluminum, thermal coal, iron ore and other major energy and raw materials have risen significantly since the beginning of this year.

If a new round of pork price increases superimposes If the price is transmitted from the production end to the consumer end to form a resonance, it will form a greater upward pressure on the CPI

.

　　Liu Xuezhi also predicts that the CPI will increase slightly in 2022, and the

annual increase may be higher than that in 2021. The

overall

increase will be moderate

, and there will be no inflationary pressure.

"In addition, the difference between the current CPI and PPI is still large, and the scissors gap between the two will be significantly narrowed in 2022." (End)