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consumers shop in a supermarket in pingyi county, linyi city, shandong province on august 9. xinhua news agency (photo by wu jiquan)

on september 9, the national bureau of statistics released the august price data. in august, the national consumer price index (cpi) rose by 0.6% year-on-year and 0.4% month-on-month. on average from january to august, the national consumer price index rose by 0.2% year-on-year.

in august, the national industrial producer price index (ppi) fell by 1.8% year-on-year and 0.7% month-on-month; the industrial producer purchase price index fell by 0.8% year-on-year and 0.6% month-on-month. on average from january to august, the industrial producer price index fell by 1.9% year-on-year, and the industrial producer purchase price index fell by 2.1%.

weather factors pushed up vegetable prices, and the year-on-year growth rate of cpi in august accelerated

in august, the cpi rose by 0.6% year-on-year, an increase of 0.1 percentage point from the previous month, and the month-on-month increase (0.4%) fell by 0.1 percentage point from the previous month. according to estimates, in the 0.6% year-on-year change in the cpi in august, the tail effect was about -0.3 percentage points, which was 0 last month; the new impact of price changes this year was about 0.9 percentage points, which was 0.5 percentage points last month.

food items, especially fresh vegetables and pork, were the main driving factors for the faster year-on-year growth of cpi in august. according to data from the national bureau of statistics, food prices in august rose by 2.8% from the previous month, affecting the year-on-year increase of cpi by about 0.51 percentage points. among them, the price of fresh vegetables rose by 21.8%, an increase of 18.5 percentage points from the previous month; the price of fresh fruit rose by 4.1% from a decrease of 4.2% in the previous month; the price of pork rose by 16.1%, and the increase fell by 4.3 percentage points from the previous month due to the high comparison base of the same period last year; the price of eggs, cooking oil, beef, mutton and potatoes fell by 4.0%-14.5%. the price of fresh vegetables affected the increase of cpi by about 0.44 percentage points, and the price of pork affected the increase of cpi by about 0.21 percentage points.

the agency believes that the increase in vegetable prices far exceeds the seasonal level, mainly due to weather factors such as high temperatures in summer and heavy rainfall in some areas. vegetable prices have been the main contributing factor to the expansion of the year-on-year increase in cpi for two consecutive months.

feng lin, director of research and development department of orient securities, pointed out that driven by the elimination of live pig production capacity and strong bullish expectations, the upward momentum of pork prices accelerated in august (up 7.3% month-on-month), but affected by the higher price base in the same period last year, the year-on-year increase in pork prices in august narrowed by 4.3 percentage points from the previous month.

in august, non-food prices rose by 0.2%, a decrease of 0.5 percentage points from the previous month, affecting the year-on-year increase of cpi by about 0.13 percentage points. the price of industrial consumer goods fell by 0.4% from the previous month's increase of 0.7%, among which the price of gasoline fell by 2.7% from the previous month's increase of 5.3%; the price of fuel-powered cars fell by 6.4%, with a slightly larger decline; the price increases of household daily necessities, interior decorations and chinese medicinal materials were between 1.1% and 6.9%, and the increase rates all fell. the price of services rose by 0.5%, a decrease of 0.1 percentage points, among which the prices of medical services, education services and household services rose by 1.9%, 1.7% and 1.6% respectively; the prices of air tickets and hotel accommodation fell by 11.9% and 3.6% respectively.

"the year-on-year growth rate of industrial consumer goods prices turned from positive to negative, and the year-on-year growth rate of service prices fell for three consecutive months, which to a certain extent offset the impact of the rapid rise in food prices." feng lin said that the overall price of industrial consumer goods was weak, mainly due to sufficient supply and insufficient demand. this is also one of the reasons for the recent arrangement of 150 billion yuan of ultra-long-term special treasury bonds to support the replacement of old durable consumer goods with new ones.

in addition, excluding the price fluctuations of energy, food and other parts, core prices continued to remain low year-on-year, and the weak momentum of price increases continued. wen bin, chief economist of minsheng bank, said that the current effective demand is still insufficient and has failed to effectively push up the core cpi, and policies need to "continue to work hard and be more powerful."

demand recovery is weak, and ppi's year-on-year decline has increased

dong lijuan, chief statistician of the national bureau of statistics' urban management department, said that in august, affected by factors such as insufficient market demand and downward prices of some international bulk commodities, the national ppi fell both month-on-month and year-on-year.

from a year-on-year perspective, ppi fell by 1.8%, a 1.0 percentage point increase from the previous month. among them, the price of means of production fell by 2.0%, a 1.3 percentage point increase; the price of consumer goods fell by 1.1%, a 0.1 percentage point increase. from a month-on-month perspective, ppi fell by 0.7%, a 0.5 percentage point increase from the previous month. among them, the price of means of production fell by 1.0%, a 0.7 percentage point increase; the price of consumer goods remained unchanged for two consecutive months.

from a year-on-year perspective, among the major industries, prices of ferrous metal smelting and rolling processing industry fell by 8.0%, prices of non-metallic mineral products industry fell by 5.1%, prices of agricultural and sideline food processing industry fell by 4.0%, prices of oil and natural gas extraction industry fell by 3.3%, prices of petroleum, coal and other fuel processing industry fell by 3.0%, prices of electrical machinery and equipment manufacturing industry fell by 3.0%, prices of automobile manufacturing industry fell by 2.2%, prices of chemical raw materials and chemical products manufacturing industry fell by 1.2%. the above eight industries together affected the year-on-year decline in ppi by about 1.47 percentage points, and the downward effect on ppi expanded by 0.74 percentage points from the previous month.

the agency believes that the year-on-year decline in ppi exceeded market expectations, and this is the 23rd consecutive month of negative year-on-year growth in ppi.

zhou maohua, a macro researcher at the financial market department of everbright bank, believes that the year-on-year and month-on-month declines of ppi in august widened compared with the previous month, mainly due to the weak recovery of domestic demand, coupled with the decline in international energy, industrial products and other commodity prices in august, and the obvious decline in domestic manufacturing raw material procurement prices in august. at the same time, from the perspective of industry, high-energy consumption, energy mining and processing industries are still in difficult adjustments, and prices have dropped significantly year-on-year, offsetting the impact of rising product prices in industries such as high-tech equipment manufacturing.

"international imported factors have a relatively obvious drag effect on domestic ppi." feng lin said that data showed that international bulk commodity prices fell overall in august, with the monthly average of the rj-crb commodity price index continuing to fall by 3.3% month-on-month, an increase of 1.0 percentage point from the previous month. on the other hand, domestically priced bulk commodity prices also continued to fall. the main reason is that against the backdrop of a significant downward trend in real estate investment, market demand has not fundamentally changed.

the price level will be moderate in the next stage, and institutions suggest that policies should increase counter-cyclical adjustments

looking ahead to the next stage, wen bin believes that prices are expected to remain low this year. summer weather factors gradually fade, and the overall supply of food prices is guaranteed, so it is not expected to continue to rise. international energy prices have fallen as expectations of recession in developed economies have intensified, while core cpi has been constrained by the simultaneous slowdown in domestic and foreign demand. in the next few months, cpi is expected to rise as the tail effect picks up, but the probability of exceeding 1% is not high.

feng lin said that with the price base in the same period last year rising, the rapid rise in vegetable prices being difficult to sustain, and the downward pressure on prices of industrial consumer goods and services further emerging, it is expected that the cpi in september may fall back to around 0.4% year-on-year, thus ending the upward trend of nearly two months.

in terms of ppi, feng lin believes that since september, oil prices have dragged down international commodity prices, but with the support of reduced supply of domestic steel, cement, coal and other products since july, domestic fixed industrial product prices are expected to stabilize in september, which will lead to a convergence of the month-on-month decline in ppi in september. based on the forecast of the month-on-month trend of ppi and the changes in the base of the same period last year, it is expected that the year-on-year decline in ppi in september will further expand to around -2.2%. affected by the higher base, the year-on-year decline in ppi in october may still widen slightly. starting from november, with the lower base of the same period last year, the year-on-year decline in ppi will tend to converge, but the possibility of returning to positive within the year has been basically ruled out.

overall, the sluggish cpi and the widening decline in ppi will continue to be a prominent feature of the macro economy in the second half of the year. the agency suggested that the need for policies to increase counter-cyclical adjustments has increased.

wen bin believes that as major central banks around the world enter a cycle of interest rate cuts, the external constraints on my country's monetary policy will be reduced, and the policy will focus more on internal balance, and it is possible to implement reserve requirement ratio cuts, interest rate cuts or adjustments to existing mortgage rates. fiscal policy will also accelerate spending and increase implementation efforts to reverse market expectations and enhance the endogenous driving force of the economy.