The National Bureau of Statistics interprets the operation of the national economy in July: the decline is a normal fluctuation
On August 15, Beijing time, the State Council's new office held a press conference on the operation of the national economy in July 2023. From the statistical point of view, compared with the previous month, the growth rate of some economic indicators in July showed a certain degree of decline. A reporter asked in this regard, although the government has introduced a series of stable growth policies, the economic data in July seems to show weak domestic and foreign demand, and the confidence of residents and enterprises is insufficient, especially the CPI turned negative year-on-year, does it mean that the economy is falling into a deflationary range? Are stronger and more effective policy measures needed?
Fu Linghui, spokesman of the National Bureau of Statistics and director of the Department of Comprehensive Statistics of the National Economy, responded that the decline in the growth rate of some major indicators is a manifestation of normal fluctuations between months. He stressed: "Overall, production demand maintained steady growth in July, employment prices were generally stable, industrial upgrading was steadily advanced, people's livelihood protection was effectively maintained, and the national economy continued to show a good trend." ”
CPI data interpretation and deflationary issues
Fu Linghui once again explained the deflation problem: "It has been made clear before that there is no deflation in China's economy at present, and it will not enter the deflationary stage in the future. From the perspective of the overall economic situation, the overall trend of recovery has been shown. He further noted that from the perspective of monetary conditions, the growth of broad money and market liquidity have remained abundant overall. As for prices, although the CPI fell year-on-year in July, from a month-on-month perspective, it turned from the previous month's decline to an increase, and the CPI fell by 0.3% year-on-year in July.
Analysis of CPI year-on-year decline factors
Fu Linghui made further factor analysis of the year-on-year decline in CPI. He mentioned that food prices are one of the main factors, which fell by 1.7% year-on-year in July, compared to 2.3% in the previous month, which is 0.3 percentage points lower for the CPI. Pork prices fell 26 percent, down 0.4 percentage points to CPI, largely due to a higher base for food prices in the same period last year. At the same time, the CPI rose by 2.7% year-on-year in July last year, which was 0.2 percentage points larger than the increase in June last year, which is also an important factor affecting the year-on-year decline in CPI.
Trends in chain data
Fu Linghui stressed that although the CPI fell year-on-year in July, from a month-on-month perspective, after five consecutive months of month-on-month decline, July saw its first rise. He noted that the CPI rose 0.2% month-on-month in July, and non-food prices turned into a 0.5% month-on-month increase from a 0.1% decline in the previous month. In particular, due to the increase in summer travel service prices, service prices increased by 1.2% year-on-year, an increase of 0.5 percentage points over the previous month. Among them, the prices of air tickets, hotel accommodation and travel increased by 11.9%, 13.2% and 13.1% respectively, mainly because the increase in demand for travel services had a significant impact on prices.
Comprehensive analysis outlook
In response to a question, Fu Linghui said that overall, the pullback in some economic indicators in July was a normal manifestation of monthly fluctuations. Although the international environment is complex and changeable, the overall operation of China's economy continues to recover. The government will continue to adopt prudent policy measures to promote steady economic growth. With the changes in the internal and external environment, China's economy will still face some challenges in the future, but the National Bureau of Statistics will continue to pay close attention to the changes in the situation and take corresponding policy measures to ensure that the economy maintains a good momentum of development.
summary
Fu Linghui analyzed further CPI data. He pointed out that if energy is excluded, industrial consumer prices fell by 0.3% year-on-year in July, a narrower decline than the previous month. If the parts other than food and energy are excluded, the core CPI rose 0.8% year-on-year, an increase of 0.4 percentage points from the previous month. This data shows that there has been a certain positive change in the relationship between supply and demand in the market. Fu Linghui stressed that from these circumstances, the year-on-year decline in CPI in July is likely to be a short-term phenomenon.
He further explained that with the gradual recovery of the economy, market demand will continue to expand, and the relationship between supply and demand is expected to gradually improve. Coupled with the gradual weakening of the impact of the high base in the same period of the previous year, the year-on-year increase in CPI is expected to gradually return to a reasonable level. This trend suggests that inflationary pressures may not persist, but rather ease gradually through a combination of economic recovery and supply-demand balance.
Fu Linghui's view highlights the dynamic changes behind the economic data and the possibility of a year-on-year decline in CPI in the short term as a result of a variety of factors. This interpretation shows that the government's monitoring and analysis of inflation is comprehensive and in-depth, taking into account not only a single indicator, but also the combined role of multiple related factors. This comprehensive analysis helps to grasp the macro situation of the economy more accurately and provides strong support for future policy formulation.
On the whole, Fu Linghui's explanation provides the market with a clearer understanding of China's economic trends. Despite the year-on-year decline in CPI in July, positive changes in market supply and demand and the continued advancement of economic recovery indicate a greater likelihood of easing inflationary pressures. The Government will remain vigilant and take appropriate policy measures to ensure the smooth operation of the economy and maintain price stability.