Multiple institutions predict that affected by falling food price and carryover effect, the consumer price index (CPI), a main gauge of consumer inflation, is expected to edge down to 1.8 percent in November year on year, as reported by the Economic Information Daily. Considering stable overall demand and tightened monetary environment throughout the year, no great inflation pressure will be seen and the growth of CPI will stay below 2 percent.
Price growth of edible agricultural products stays stable in November. According to the national market price index of edible agricultural products reported weekly by the Ministry of Commerce (MOFCOM), price of edible agricultural products reported slight growth twice and slight drop once in November. Average price of food in 50 cities reported by the National Bureau of Statistics (NBS) shows that in the first and middle 10 days of November, price of main food stays stable with vegetable price slightly down and meat price slightly up.
Lian Ping, chief economist with the Bank of Communications, predicts that food price in November is expected to edge down by around 0.3 percentage point month on month. Lian claims that domestic refined oil products saw two price hikes in November with the price hike announced on Nov. 16 the highest in 2017. The price hikes of refined oil products might drive non-food price slightly up. In general, the year-on-year growth of non-food price might further climb in November. Carryover effect might drop slightly from 0.34 percent recorded in previous month to 0.2 percent. The year-on-year growth of CPI in November 2017 is expected to record 1.8 percent, representing a growth slightly lower than that of previous month.
Jiang Chao, chief economist at Haitong Securities, claims that the month-on-month growth of food price since November reported by the MOFCOM and the NBS recorded 0.1 percent and -0.6 percent, respectively. A small decline of CPI to 1.8 percent is expected in November. In the view of Jiang, prices of commodities are declining on the whole. Prices of commodities become divided since November. Prices of steel and cement, greatly affected by production restriction due to environmental protection, largely up, while price of non-ferrous metals which sees no strict production limitation largely down. Two price indexes of the manufacturing purchasing managers' index (PMI) of the manufacturing industry in November show that both purchasing price of original materials and ex-factory price of finished products decline when compared with that of October, suggesting that price growth largely slow down since November.
However, Xie Yaxuan, chief macro analyst with China Merchants Securities, predicts that year-on-year growth of CPI in November might climb slightly to 2.0 percent. Xie claims that fresh vegetable, fruit and aquatic products see large price drop in November month on month, the month-on-month drop of pork price also expanded in November when compared with that of previous month. Food price is expected to register a month-on-month growth of -0.1 percent. But mainly affected by rising oil price, month-on-month growth of non-food price might rebound to 0.5 percent, and month-on-month growth of CPI will climb to 0.3 percent accordingly.
As to annual CPI, Lian believes that CPI in the first 10 months of the year report a year-on-year growth of 1.5 percent, recoding a new low in recent years. Year-on-year growth of CPI in December is expected to still stay below 2 percent. It can be estimated that CPI will maintain a year-on-year growth of 1.5 percent in 2017 and see mild inflation pressure. It is expected that year-on-year growth of CPI in 2018 might climb since cardinal number in 2017 is small. But under the background of stable overall demand and tightened monetary environment, no great inflation pressure will be seen and the year-on-year growth of CPI in 2018 might register around 2 percent.
Translated by Jennifer Lu
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