Caixin Survey | April CPI Year-over-Year Growth May Slightly Slow Down; PPI Year-over-Year Increase May Expand

[Caixin] Mainly affected by the widening decline in pork prices and the softening of fresh vegetable prices, the resident consumer price index (CPI) in April may show weaker year-on-year performance, but core CPI may remain stable year-on-year; after ending a 41-month consecutive decline in March, the producer price index (PPI) for industrial products in April is expected to expand driven by factors such as soaring international oil prices.

A recent survey by Caixin of 11 domestic and foreign institutions shows that the interviewed economists all expect the year-on-year increase in April CPI to be flat or narrower compared to March, with an average forecast of 0.8%, lower than the previous value by 0.2 percentage points, with a forecast range of 0.5% to 1.0%.

CICC’s macro team predicts that the year-on-year growth rate of CPI in April may remain around 1.0%. Regarding food, based on the 10-month breeding stock of productive sows and the 6-month piglet stock, April is a period of relatively high supply pressure, which will ease afterward. The recent low point in pig prices may have already appeared in April, with pig prices in 22 provinces and cities initially falling seasonally in early April and then stopping the decline and rebounding in mid-April. The year-on-year decline in pig prices expanded to 28.5%. Driven by warmer temperatures and sufficient market supply, the average wholesale price of 28 vegetables nationwide fell by 10.3% month-on-month, and fresh vegetable prices may slow down in year-on-year terms. In terms of energy, international oil prices remain volatile at high levels, and domestic gasoline and diesel retail prices initially rose and then fell. The average price of refined oil products for the month increased by 9.2% month-on-month, and combined with a low base, the year-on-year growth rate of domestic refined oil prices rose from 7.1% to 17.7%.