The CPI fell 0.5% year-on-year in November, the third negative monthly growth this year
On December 9, data released by the National Bureau of Statistics showed that in November 2023, the national consumer price index (CPI) fell by 0.5% year-on-year, the third year-on-year negative growth in the year, and this growth rate was also a new low since November 2020 (-0.5%).
As an important indicator reflecting consumer demand, the year-on-year growth rate of CPI has entered a slow downward channel as a whole since September 2022, and the CPI in July 2023 is negative for the first time this year, turning from negative to positive to 0.1% in August, but falling to 0% again in September, and negative growth for two consecutive months in October and November.
For the reasons for the negative growth of CPI growth in November, Dong Lijuan, chief statistician of the Urban Department of the National Bureau of Statistics, issued an article to interpret that the year-on-year decline in CPI increased by 0.3 percentage points compared with the previous month, mainly due to the year-on-year increase in energy prices (energy prices increased by 1.2% year-on-year from last month to 1.3% year-on-year), and the year-on-year impact on CPI increased by 0.19 percentage points compared with the previous month. Among them, food prices fell by 4.2 percent, a slight increase of 0.2 percentage points. Core CPI, which excludes food and energy prices, rose 0.6% year-on-year, the same increase as the previous month, continuing to rise modestly.
Zhang Liqun, a researcher at the Macroeconomic Research Department of the Development Research Center of the State Council, told the Economic Observer that the increase in the decline in CPI in November still indicates that the problem of demand contraction is still developing. And dynamically, this contraction has increased. Therefore, special attention should be paid to the restraining effect of demand contraction on economic recovery, especially since this restraining effect has a tendency to be self-reinforcing.
In this regard, Zhang Liqun suggested that the next step is to further intensify the policy of expanding domestic demand. This includes increasing the countercyclical adjustment of macroeconomic policies and fiscal policies to support the accelerated recovery of domestic demand.
In terms of specific food prices, in November, pork prices fell by 31.8 percent year-on-year, an increase of 1.7 percentage points; the prices of eggs, edible oil, beef and mutton, poultry meat, and aquatic products fell by between 1.1 percent and 10.5 percent, and the decline rate expanded; the prices of fresh vegetables increased by 0.6 percent from a year-on-year decrease of 3.8 percent in the previous month; and the prices of fresh fruits rose by 2.7 percent year-on-year, an increase of 0.5 percentage points.
Pan Xiangdong, chief economist of the Qirhenium Research Institute, said that on the whole, the CPI trend is in line with our previous expectations. From the perspective of the components of CPI, the pattern of stronger supply than demand for most food products continues.
On the other hand, on a year-on-year basis, the PPI fell by 3.0%, an increase of 0.4 percentage points from the previous month. Dong Lijuan said that in November, affected by factors such as the decline in international oil prices and the weak market demand for some industrial products, the national PPI turned from flat to declining month-on-month, and the year-on-year decline expanded.
According to the data of the National Bureau of Statistics, the year-on-year changes in the prices of major industries in November were obvious: the prices of coal mining and washing industry, non-metallic mineral products industry, petroleum, coal and other fuel processing industries fell by 6.3% to 15.8%, and the decline rate widened; the prices of chemical raw materials and chemical products manufacturing, ferrous metal smelting and rolling processing industry fell by 6.8% and 2.3% respectively, and the decline rate narrowed. In the equipment manufacturing industry, the manufacturing price of lithium-ion batteries decreased by 11.6%, the price of computer communication and other electronic equipment manufacturing decreased by 3.5%, and the price of automobile manufacturing decreased by 1.6%.
Pan Xiangdong said that looking ahead, with the weakening of the base and the stabilization of food sub-items such as pork, CPI is expected to climb slightly back to the positive growth range, and it is expected that the supply and demand of crude oil will remain tightly balanced in 2024, and the price center may move up slightly, so it is expected that PPI will also show a gradual recovery trend in 2024.
Image source: National Bureau of Statistics