May CPI Material Approaching 5.5%

The National Bureau of statistics will announce the major economic data in May next week. Analysts believe that due to a small increase in pork and eggs and other food prices, the May consumer price (CPI) increase may reach 5.4%-5.5%. It is expected that the interest rate window may open again in June.

Many experts pointed out that mid year may be the biggest price pressure period this year. Managing inflation expectations will continue to be the focus of regulation in the coming period. After the three quarter, CPI growth may be down.

Price increase or rebound

From the price monitoring data released by the National Bureau of statistics and the Ministry of Commerce, there are some new developments in price operation since May. First of all, the vegetable prices in the early stage are obviously stable. In the first three weeks of May, the average price of 18 vegetables released by the Ministry of Commerce decreased by 3.1%, 1.9% and 0% respectively. Second, some of the new price rises have risen. The above two sector data show that the price of pork and aquatic products has increased by more than 1% over the past few weeks, and the price of eggs has continued to rise since the Spring Festival.

On this basis, assuming that non food prices continue to rise steadily earlier, CPI growth in May is still facing a certain rebound pressure. CICC research report that the recent rise in pork prices in the anti season, southern part of the drought exacerbated by seasonal aquatic products due to fishing prices, is expected to price rise in May may hit a new high in the year, reaching 5.3%-5.5% *.

According to the Research Report of Anxin securities, in May, the price of foodstuffs could increase slightly, plus the momentum that the non food prices were relatively strong, the CPI rose by 5.5% in May.

Some experts believe that in May CPI The increase will continue the momentum of early fall. Li Huiyong, chief macroeconomic analyst at Shenyin Wanguo believes that the CPI increase in May may be around 5.2%, down 0.1 percentage points from last month. But in June and July, CPI will rise to 5.6%-5.7%, and CPI will probably increase by more than 5% before October.

Analysts believe that in China's grain harvest for seven consecutive years, Stock More abundant background, the recent drought in some parts of the South will not have a real impact on food prices for the time being. According to the Ministry of agriculture's investigation and analysis, the area of summer grain is expected to reach 415 million acres this year, an increase of about 3000000 Mu over the previous year. Han Changfu, Minister of Agriculture recently said that this summer grain harvest will be a good harvest and winter wheat is expected to increase production for 8 consecutive years.

Central bank may raise interest again

Recently, many agencies have raised the annual price inflation expectations. CICC research report believes that based on the price trend in May, the CPI increase over the year is more likely than expected. CPI growth is expected to increase by more than 5% in the three quarter and back to around 4% in the fourth quarter. Therefore, the CPI growth forecast for 2011 will be increased from 4.5% to 4.8%.

Li Huiyong raised the annual price increase from 4.5% to 4.9%. In his view, liquidity contraction and Economics In the context of adjustment, the gradual decline in price increases is still a probability event. Because of drought and housing prices in southern parts of the country, prices may fall later than expected in the future.

In view of the rising inflation expectations, analysts expect that the central bank may again raise the interest rate weapon, and the interest rate window will open again in June.

Apart from prices, another focus of the recent macro economy is that China's Manufacturing Purchasing Managers' index (PMI) and industrial added value and other economic indicators have dropped, leading to the economic downturn. Market participants interpret this in two ways. Some market participants believe that if the economic downturn is too obvious, it will bring risks of stagflation and curb price regulation. Another market participants believe that the current economic downturn is controllable. The consensus of both sides is that in the short term, anti inflation is still the focus of macroeconomic regulation and control. In the face of the likely new CPI growth of May, interest rate hike is still the preferred tool to prevent inflation.

Fan Jianping, director of the Economic Forecasting Department of the state information center, said that the domestic economy has seen signs of cooling down recently, creating a precondition for the price no longer to rise further in the second half of the year. In the coming period, macroeconomic regulation and control will remain the primary objective of stabilizing prices. The year-on-year high price increase may occur in the two quarter, and the CPI increase in the second half of this year will fall.