Prices are generally stable – interpretation of CPI and PPI data in 2023
Data released by the National Bureau of Statistics on the 12th showed that throughout 2023, the national consumer price index (CPI) increased by 0.2% compared with the previous year, and price operations remained generally stable. Looking forward to 2024, my country’s prices are expected to recover moderately, and there is a solid foundation for ensuring supply and stable prices.
Prices are related to economic operations and affect people’s lives. In 2023, my country’s monthly CPI year-on-year increases are all lower than the annual expected target of around 3%, with the highest increase in January reaching 2.1%, and the increase has been at a low of less than 1% since March.
Judging from the situation in December 2023, affected by factors such as cold wave weather and increased consumer demand before the holidays, the CPI for that month fell by 0.3% year-on-year, and the decline narrowed by 0.2 percentage points from the previous month; the month-on-month decrease turned from a 0.5% decrease last month to an increase of 0.1%.
Among my country’s CPI “basket” commodities, food accounts for a relatively high proportion. For the whole of 2023, food prices fell by 0.3% year-on-year. Among them, in December 2023, food prices fell by 3.7% year-on-year, and the decline narrowed by 0.5 percentage points from the previous month; the month-on-month decrease changed from a 0.9% decrease in the previous month to an increase of 0.9%.
Dong Lijuan, chief statistician of the Urban Department of the National Bureau of Statistics, analyzed that in December 2023, rain, snow and cold wave weather affected the production, storage, and transportation of fresh agricultural products. Coupled with the increase in consumer demand before the holidays, the prices of fresh vegetables, fresh fruits, and aquatic products increased by 6.9%, 1.7%, and 0.9% month-on-month respectively.
Pork prices account for a high proportion of food prices. Statistics show that throughout 2023, pork prices fell by 13.6% year-on-year, with a year-on-year drop of 26.1% in December, which was the main factor driving the year-on-year decline in CPI that month.
Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine, Chinese Academy of Agricultural Sciences, said that due to the fact that the pig population is still at a high level in the fourth quarter of 2023, the number of pigs sold may remain at a high level in the short term. Coupled with the seasonal decline in consumption after the Spring Festival, it is expected that in the first half of 2024, especially in the first quarter, pig prices will face a period of shock and bottom. As the production capacity of reproductive sows is steadily reduced, the supply and demand situation of pork will gradually improve in the second half of this year, and pig prices are expected to gradually recover moderately, but overall they will remain in a narrow range of fluctuations.
Throughout 2023, the core CPI excluding food and energy prices rose by 0.7% year-on-year, and consumer prices for my country’s industrial consumer goods and services remained stable.
Li Chao, spokesperson of the National Development and Reform Commission, said that the CPI will generally run at a low level in 2023. As imported, cyclical, seasonal, and other factors change, the base effect gradually weakens, and the demand for goods and services continues to recover. The CPI is expected to moderately pick up this year.
Looking at industrial producer prices, for the whole of 2023, the national industrial producer price index (PPI) dropped by 3% from the previous year. Among them, affected by factors such as the continued decline in international oil prices and insufficient demand for some industrial products, in December 2023, PPI fell by 2.7% year-on-year, a decrease of 0.3 percentage points narrower than last month; it fell by 0.3% month-on-month, and the decrease was the same as last month.
Dong Lijuan analyzed that in December 2023, international oil prices continued to decline, driving the domestic oil and natural gas mining industry, petroleum coal, and other fuel processing industry prices to fall by 6.6% and 3% month-on-month respectively; the non-ferrous metal market demand was insufficient, and non-ferrous metal smelting and rolling processing Industrial prices fell by 0.3% month-on-month; near the end of the year, construction of some infrastructure projects accelerated, and the supply of cement and other building materials was tight. Cement manufacturing prices increased by 2.2% month-on-month, and ferrous metal smelting and rolling processing industry prices increased by 0.8% month-on-month.
“As total demand continues to pick up, market confidence gradually increases, economic performance recovers, and policies and measures to boost industrial economic development are implemented in detail, corporate production, and operations are steadily advancing, and the superimposed base effect is weakened. The year-on-year decline in PPI is expected to continue in the next step. Narrow.” said Wang Likun, a researcher at the Institute of Market Economics, Development Research Center of the State Council.
Guaranteed supply and stable prices of important livelihood commodities such as grains, oils, meat, eggs, vegetables, fruits, and milk are related to the people’s basic lives. As the Spring Festival of 2024 approaches, it is crucial to secure people’s “rice bags” and “vegetable baskets.”
The National Development and Reform Commission and the State Administration of Grain and Material Reserves jointly issued a notice to make arrangements to ensure supply and stable prices in the grain and oil market during New Year’s Day, Spring Festival, and “Two Sessions” in 2024; Hubei closely monitors the price changes of important livelihood commodities such as pork, vegetables, and eggs. , strengthen risk warning and prediction; Rizhao City, Shandong Province has increased market supervision and carried out law enforcement inspections to stabilize prices and quality… Recently, relevant departments and localities have implemented central deployments to coordinate and ensure supply and price stability.
He Yadong, spokesperson of the Ministry of Commerce, said that in order to ensure the supply of the holiday market, all localities will be guided to increase the organization of the supply of daily necessities, strengthen the connection between production and marketing, and enrich the variety of commodities; focus will be given to guiding the commerce authorities in Gansu and Qinghai to accelerate the recovery of commercial outlets in earthquake-stricken areas; according to Due to low temperature weather and the need to ensure supply in disaster-stricken areas, as well as changes in market supply and demand, be prepared to release meat and other reserve commodities.