The Earthquake Did Not Change The Trend Of CPI Decline, Or 8% In May.

As the biggest risk facing the macro-economy, inflation has always been the focus of attention in recent months.

After the Wenchuan earthquake in Sichuan, whether the CPI (consumer price index) can go down is a matter of concern.

It is worth noting that on the 24 day of the China International Capital Market Forum, two experts agreed that CPI growth in May would be lower than 8.5% in April.

Gong Fangxiong, chief executive of JP Morgan and chief economist of Asia, believes that the earthquake has little effect on inflation itself.

"Our view of inflation is that CPI has reached 8.7% in February, and CPI in May should be lower than that in April, which should be around 8%.

If not, the earthquake disaster should be below 8%.

He also pointed out that the impact of earthquake disasters on inflation is only one month in May, and inflation in the second half of this year should gradually decline and return to below 6%.

Ha Ji Ming, chief economist of CICC, said that according to the weekly agricultural price forecast of Ministry of Commerce and the Ministry of agriculture, the price of agricultural products decreased by 2.9% in the first few weeks of May, but the weekly price data of agricultural products mainly affected food prices in CPI only 1/3, and the non food prices were mainly affected by PPI.

I believe PPI will be relatively high in May as oil prices are rising.

But on the whole, inflation may be lower in May than in April, and may be 6% to 7% in the whole year.

He believes that the earthquake affected areas in the whole of Sichuan only about 5%, that is, only about 0.4% in the country, short-term inflation may have a negative effect, but on inflation and economic activities will not have a big impact.

Market participants believe that once the CPI decline in May, the possibility of the central bank's interest rate hike will be reduced again.

Referring to the current strategy for dealing with inflation, Ha Jiming said that inflation is a common problem facing the world in the context of the sharp rise in oil prices.

In order to curb inflation, China has been setting up reserve ratio and hedging means. The so-called window guidance of credit has also been playing a role, and this year's role may be even greater.

But he also pointed out that from his recent study of how the 64 economies cope with inflation, inflation has a negative relationship with inflation, and inflation in smaller countries with faster appreciation has little effect on raising interest rates.

Because of this, he suggests continuing to curb inflation through the appreciation of the renminbi.

Gong Fangxiong said that in the second half of this year, inflation is coming down. Many macroeconomic policies should be launched, such as the reform of oil prices.

He believes that this is a pressing problem in the case of high oil prices.

Gong Fangxiong worries that there is no need to panic because oil price reform may lead to a sharp rise in inflation.

He pointed out that in October of last year, China's oil price was adjusted by 10%, and its impact on inflation was only 0.4%. Now China's oil price is 30% to 40% worse than the international oil price, and its impact on inflation is about 1.5%.

When the prices of farm households are stable, the introduction of oil subsidy reform will push inflation up at most.

"Besides, we are a high growth economy, and we should be more tolerant of inflation itself.

"He further pointed out.

CPI8%

Gong Fangxiong, chief executive of JP Morgan and chief economist of Asia, believes that the earthquake has little effect on inflation itself.

"Our view of inflation is that CPI has reached 8.7% in February, and CPI in May should be lower than that in April, which should be around 8%.

If not, the earthquake disaster should be below 8%.

"