Our reporter Meng Ke
On January 12th, the National Bureau of Statistics will release December 2022 CPI (Consumer Price Index) and PPI (Industrial Producer Ex-factory Price Index) data. The "Securities Daily" reporter interviewed the five chief executives, and most of them predicted that in December 2022, the CPI would increase slightly year-on-year, and the PPI decline would be narrowed. Looking forward to 2023, driven by the recovery of consumption, the inflation level will continue to rise, and the CPI growth center may be higher than last year, but the growth trend may be moderate.
The year-on-year growth rate of CPI may rise slightly
Wang Qing, chief macro analyst of Oriental Jincheng, predicted that the CPI in December 2022 will be around 1.8% year-on-year, with a slight increase of 0.2% compared with the previous month.
Wen Bin, chief economist of Minsheng Bank, said that in terms of food, the most flexible pork and fresh vegetables went out of the opposite market. Among them, due to the epidemic, the demand for pork prices weakened significantly, and the previous reluctance to sell turned to centralized slaughter, and pork prices fell. The price of fresh vegetables rose in advance, and fresh vegetables and fresh fruits rose greatly in the middle and late December. It is estimated that food prices will increase slightly in December 2022.
"In terms of non-food, the price of refined oil has been continuously lowered since the end of November 2022, and it is expected that the price of energy will drop significantly. The prices of various services, including housing rent, tourism, entertainment, education and family services, will be weak; In terms of consumer goods, it is expected that only clothing and drug prices will increase due to seasonality and epidemic demand respectively, and both fast-moving and durable categories will be weak. " Wen Bin said that overall, it is estimated that the CPI will decrease by 0.1% in December 2022, and the year-on-year growth rate will slightly increase to 1.8%. In 2022, the CPI will increase by 2.0% year-on-year, which is basically in a reasonable range.
Chen Li, chief economist and director of the research institute of Chuancai Securities, said that the CPI is expected to be around 1.8% in December 2022.
"In terms of CPI, the price of food items rose slightly in December 2022, and the price of non-food items increased seasonally at the end of the year. The CPI rebounded slightly to around 1.9% year-on-year." The chief economist of CITIC Securities clearly judged.
Deng Haiqing, chief economist of AVIC Fund, believes that overseas countries are still plagued by high inflation, and the inflation level in Europe and America is still at a high level in recent decades. Relatively speaking, the overall inflation situation in China is moderate, which is inseparable from China’s implementation of a prudent monetary policy and not engaging in "flood irrigation".
In terms of PPI, Wen Bin predicted that in December 2022, the year-on-year decline of PPI was significantly narrowed, and international commodity prices were mixed. Among them, crude oil prices rebounded slightly after stabilizing at a low level, and the supply and demand situation of natural gas was better than expected, which led to the price decline, and the prices of major metals rebounded slightly. Faced with the weakening of imported inflationary pressure and insufficient demand, the overall price of domestic industrial products is weaker than that of the international market.
"In terms of upstream energy, the price of refined oil has been continuously lowered, and the price of coal has continued to weaken, but the price of natural gas has rebounded, and the spot price of metals has risen as a whole; In the middle and lower reaches, the prices of building materials and chemical products all declined, and the prices of live pigs and feed dropped sharply. " Wen Bin said that in December 2022, the manufacturing PMI ex-factory price index was 49.0%, which was still below the critical line of 50%, but it was higher than that in November 2022. It is estimated that the PPI will decrease by 0.1% in December 2022, and the year-on-year decline will be significantly narrowed to 0.2%.
Chen Wei said that in December 2022, the international crude oil price was less than expected and affected by the Russian oil price limit, and the PPI continued to decline, about -0.3%.
It is clearly predicted that "in December 2022, the purchasing price of PMI raw materials and the ex-factory price index of industrial products all increased slightly, while the prices of coal, crude oil, cement, black and non-ferrous metals all increased to a certain extent, driving the PPI to increase slightly from the previous month, and the PPI will rebound to near 0% year-on-year."
According to Wang Qing’s analysis, the PPI in December 2022 will be around -0.5% year-on-year, with a decrease of 0.8 percentage points from last month. Affected by factors such as epidemic fluctuation affecting production and high infrastructure investment driving market demand, domestic steel and coal prices generally rose in December 2022, with the former’s year-on-year decline narrowing and the latter’s year-on-year increase expanding. This will drive the PPI deflation in the month to ease.
In 2023, the domestic inflation situation is controllable as a whole.
"Looking back on 2022, the year-on-year peak of CPI appeared in September, but the increase was only 2.8%. The year-on-year central probability of CPI was around 2.0%, which was in a moderate state, in sharp contrast to high inflation overseas. In terms of PPI, in 2022, PPI showed obvious characteristics of’ high before and low after’. At the beginning of the year, the PPI was as high as 9.1% year-on-year, and it turned into deflation in the fourth quarter. " Wang Qing said that China’s fiscal and monetary policies were flexible and moderate in the early stage; At the same time, in 2022, the consumer demand of residents is weak, the supply is relatively sufficient, and the market supply balance does not support a large increase in prices. To sum up, it is estimated that CPI will continue the moderate trend of 2.0% in 2023.
Wang Qing said that although the PPI trend is weak at present and in the future, both the international crude oil price and the domestic prices of major industrial raw materials such as coal and steel are still at a high level. At present, the regulatory authorities are deploying and releasing advanced production capacity, and there is still some room for downward price in the later period.
Looking forward to 2023, Deng Haiqing predicted that with the "great recovery of consumption" and the low base of pork prices, domestic inflation may reverse the downward trend in 2023, and CPI may go up by 5% in some months. However, unlike inflation in Europe and America, China’s economic growth rate is in the process of recovering to the potential economic growth rate, not overheating. Therefore, the domestic inflation situation will be controllable as a whole in 2023.
In addition, Wang Qing said that in 2023, with the recovery of consumption, financial institutions will also develop more marketable financial products around key areas such as education, culture, sports and entertainment, and strengthen comprehensive financial support for service consumption. Employment and income are the basis of residents’ consumption. In the short term, the policy will further stabilize the basic employment by reducing and exempting corporate taxes and fees and granting employment subsidies. The urgent task is to reduce the obviously high youth unemployment rate as soon as possible, so the effect of promoting consumption will be more obvious.
In Ming Ming’s view, in terms of consumer demand, as the previous epidemic repeatedly led to twists and turns in consumption repair, affecting residents’ willingness to spend, more policies can be deployed from two aspects to promote consumption and expand domestic demand. First, the peak of new purchases at the end of the year and the beginning of the year can further promote the implementation of a series of policies and measures to expand automobile consumption, support the purchase and use of new energy vehicles, accelerate the activation of the used car market, and at the same time implement policies and measures to promote the consumption of green smart home appliances, carry out trade-in of home appliances, and promote green smart home appliances to the countryside. The second is to use consumer vouchers to incite the consumer market, support the issuance of consumer financial loans, boost confidence and guide consumption.