April Data Showed That Inflation Eased &Nbsp, And Whether The Disputes Were Continuing.

National Bureau of Statistics announced 11, April residents of China

Contributing to the easing of inflation pressure

From the main economic data released in April, the factors contributing to the easing of inflation pressure are taking shape.

First is the economic growth of the callback.

CICC reported that in April, the growth of above scale industrial added value fell sharply compared with March, and the growth rate of the chain also dropped significantly, indicating that the growth momentum of industrial production was obviously weakened, and the signs of slowing economic growth were further apparent.

In this regard, Societe Generale Bank (601166, stock bar) senior economist Lu political commissar told the "economic reference daily" reporter, taking into account the government investment to drive the whole society to continue to increase investment in fixed assets, although the industrial growth rate has slowed down, but we believe that the overall economic growth is still in the normal range, the moderate growth rate is conducive to the suppression of inflation, there is no need to worry about excessive decline.

Imported inflation pressure also has a tendency to slow down.

Lu Zhiming, a researcher at the financial research center of Bank of Communications (601328, stock bar), said the Federal Reserve recently announced that its second round of quantitative easing policy will end in June 30th this year.

There is no indication in its statement that a new round of quantitative easing will be launched.

This shows that after the second half of the year, the pressure of global liquidity and the continuous rise of commodity prices caused by the quantitative easing policy of the United States will be reduced, and the domestic import inflation pressure will also ease.

The recent sharp fluctuations in international commodities have begun to show this sign.

In addition, in the second half of last year, with the government's continuous and effective control of inflation policy, the domestic food prices began to be effectively controlled. Some of the food prices represented by vegetables began to fall due to seasonal factors, which would effectively reduce the pressure of rising prices.

The monetary base of domestic price inflation is also being effectively controlled.

Lu Zhiming said that in the context of continued tightening of monetary policy, the growth rate of M1 has dropped sharply since the beginning of last year. It is expected that the pressure of rising prices will be eased significantly in the second half of the year.

"Taking into account the obvious weakening of the tail factor in the second half of the year, we still maintain a year-on-year increase of about 4.5% in 2011 CPI, and the annual price increase will show a trend of high before and after low and overall controllability."

He said.

Based on the above considerations, CICC also predicted that as the price of food was affected by seasonal factors, the growth rate would gradually slow down and the elimination of the anti seasonal growth power of non food prices by the continued monetary tightening policy. The CPI trend of the whole year is expected to continue to move towards the expected direction of the historical law.

The report said that the CPI growth rate of 5 and 6 months was slightly higher than 5%, but from the three quarter, the level of inflation would take on a significant downward trend.

In April, the ex factory price of industrial products (PPI) increased by 6.8% over the same period last year, rising by 0.5% compared with the same period in March.

Evaluating the April CPI, the National Bureau of Statistics spokesman Sheng Lai Yun said, "we feel that the trend of rising prices should be initially curbed, and the state's policies and measures on price regulation have achieved initial success."

{page_break}

Bad profit

Inflationary pressure is still high.

However, we also do not forget the warning when Sheng Lai delivers good news: from the domestic and international situation, the pressure of price rise is still relatively large.

According to his analysis, on the one hand, the inflationary pressure from imported countries is still relatively large, because there is no obvious change in the macro policy of western countries, and liquidity is relatively adequate; on the other hand, the trend of domestic production data, labor costs and raw material prices will not be fundamentally reversed in the short term.

"Therefore, the pressure of rising prices is still not to be belittled.

Under such circumstances, we must not take it lightly. We must maintain the price stability in the primary position of macroeconomic regulation and control. We must carry out the implementation according to the central government's plan and keep prices basically stable. "

Sheng Laiyun said.

Wang Dashu, a professor at the school of economics, Peking University, also told the economic reference daily that the CPI data in April were almost the same as those expected before the market. Although it has dropped somewhat than in March, the drop rate has been smaller. It is hard to say that inflection point has already appeared.

This round of price rise is a mixed inflation. Demand is only part of it. Cost push and imported inflation pressure are also important reasons.

Hu Chi, deputy director of the China Federation of enterprise research, said that the CPI in April was still at a relatively high level, mainly because most of the factors that pushed up prices continued to exist.

For example, domestic liquidity is still relatively adequate; factors such as the price of raw materials and the rise in labor wages are still playing a role in pulling prices up from cost; from the outside, international import inflation has a greater pressure on CPI.

"Although many analysts believe that this year's price trend will be high before and after the low, but in the light of past experience, we must not lightly talk about such a situation, but blindly optimistic.

Generally speaking, the pressure of the current price increase is still relatively large, and prices will remain at a high level, and the possibility of continuing upward again will not be ruled out. "

He told the economic reference Daily: "with regard to the use of regulatory policies, the current package of inflation control policies need to be carried out to the letter.

In May 3rd, the central bank issued the implementation report of China's monetary policy in the first quarter of 2011, which shows the intention of ensuring the continuity of monetary policy implementation under the severe situation of high inflation.

Only in this way can we provide as much protection as possible for the target of about 4% of the price this year.

Qiao Yongyuan, an economist at Monita (Shanghai) investment and Development Co., Ltd. also said that the inflationary pressure of imports did not weaken as commodity prices changed.

Considering that the growth of food prices will return to the seasonal pattern in the next few weeks, they will increase the CPI forecast for the two quarter to 5.1%, and the CPI forecast for the whole year will be correspondingly raised to 4.7%.

Lu commissar also reminded that since October last year, 4 months of the rise in the price of non food prices rose to a record high in 1997.

This year, vegetable prices fell faster than in previous years. At present, the pressure on vegetable prices to fall in May is still large, which may aggravate the pressure of rising prices in June and beyond.

debate

The parties are divided on whether to raise interest rates in May.

Because of the different interpretations of the April CPI data, some scholars believe that the data indicate that the future will be better. Some scholars believe that the inflationary pressure is still high. The market is very serious about whether the central bank will increase interest rates in the short term, specifically in May.

Dong Xianan, chief economist of Beijing leading international financial information company, told the economic reference daily that China's current policy will continue to regulate prices as the first choice, but with the inflation pressure eased significantly, accompanied by the economic slowdown, the regulation will be relaxed internally to achieve a soft landing.

Lu commissar also said that taking into account the tightening policy is receiving results, industrial production has slowed down, and some influential senior policy officials believe that inflation will fall in the second half of the year, we tend to think that: in May will not raise interest rates, but still may raise the 1 reserve rate.

Sun Yongmei, an associate professor at the China Institute of economic reform and development, Renmin University of China, holds the opposite view.

She told the economic reference daily that the data in April showed that although China's economic operation trend was good, the market was active and investment power was strong, but there were also problems such as high CPI, high real estate prices and insufficient consumption capacity of residents.

Relying solely on increasing reserves for bank deposits is limited. The future monetary policy should focus on reducing the currency market and increasing the operation of funds to reduce liquidity.

Wang also said that for our country, the real effective way to control inflation is interest rate policy, and price means are more effective than quantitative measures.

Raising the deposit reserve only affects the money supply, does not affect the demand for money, and the bank can absorb more deposits. Now there is a phenomenon between banks, such as banks launching short-term, high return financial products at the end of the month.

China's deposit reserve ratio has reached a high point, which is rare in the world.

Zhou Jingtong, senior economist at the head office of strategic development of Bank of China (601988, stock bar), said that China's CPI is still running at a high level as a whole. Food prices have risen rapidly, and the rise in non food prices has not slowed down.

From the perspective of the driving factors, PPI has dropped slightly and is still pmitting to CPI. Although commodity prices have dived, the prices of commodities are expected to rise in the future. Import inflation pressure will continue to push CPI up. In addition, the United States may also introduce quantitative easing monetary policy. Japan also released a large amount of money after the great earthquake.

So it is expected that at least in 5 and June, CPI will rise by 5%.

Therefore, Zhou Jingtong told the economic reference Daily reporter: there will be interest rate hikes in the two quarter, possibly in May.

He said that although there are some drawbacks in raising interest rates, the advantages outweigh the disadvantages as a whole.

In particular, considering that China's deposit reserve ratio has reached a very high level, it would be more necessary to raise interest rates if it would further weaken the function of bank financing funds.