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Year-on-year Growth of CPI and PPI Expands in June 2018

Submit Time:15-08-2018 | Zoom In | Zoom Out

Author: | Source:National Bureau of Statistics on July 10, 2018

Abstract:

According to the data released by the National Bureau of Statistics today, the consumer price index (CPI) in June 2018 fell by 0.1% month on month and rose by 1.9% year on year and the producer price index (PPI) over the same period went up by 0.3% month on month and grew by 4.7% year on year. Below are some interpretations of the data by Sheng Guoqing, a senior statistician from the Department of Urban Surveys of the National Bureau of Statistics.  

First, the growth rate of CPI continues to shrink on a month-on-month basis but slightly expands on a year-on-year basis.  

From the month-on-month point of view, CPI maintained a basically stable tendency, and its drop shrank by 0.1 percentage point over the last month. Food prices fell by 0.8%, with the drop shrunk by 0.5 percentage point over the previous month, causing CPI to decline by 0.16 percentage point. Seasonable fruits and vegetables hit shelves in a great amount. As a result, the prices of fresh fruits and vegetables went down 6.7% and 1.8%, respectively, which caused CPI to fall by about 0.16 percentage point combined. This is also the primary reason for the CPI drop. The pork prices ended the three-consecutive-month drop, and started to rebound by going up by 1.1%, causing CPI to increase 0.02 percentage point roughly. Non-food prices rose by 0.1%, the same as the last month, causing CPI to rise by about 0.11 percentage point. Affected by the increasing house rentals and drug prices, the prices of dwelling and healthcare both went up by 0.2%, which caused CPI to grow by about 0.06 percentage point combined. As the number of travelers soared and more demands emerged, the prices for tours, flights and hotel rooms went up by 1.4%, 0.9% and 0.4%, respectively. The three factors combined caused CPI to increase by 0.03 percentage point roughly. Affected by recent adjustments to domestic refined oil prices, gasoline and diesel prices went up by 1.8% and 1.9%, respectively, contributing about 0.04 percentage point to CPI rise together.  

From the year-on-year point of view, CPI saw its growth slightly faster, and continued to rise moderately. Food prices rose by 0.3%, causing CPI to ascend by around 0.05 percentage point. Of these, the prices of eggs and fresh vegetables went up by 17.1% and 9.3%, respectively, contributing 0.27 percentage point to CPI rise together; the prices of beef, mutton and poultry rose by 3.1%, 13.1% and 6.7%, respectively, causing CPI to increase by about 0.14 percentage point combined; and the prices of pork and fresh fruits fell by 12.8% and 5.3%, respectively, pulling down CPI by about 0.42 percentage point together. Non-food prices rose by 2.2%, causing CPI to ascend by around 1.80 percentage points. Of these, the prices of healthcare picked up by 5.0%, the prices of educational services grew by 2.7%, the prices of transportation and telecommunications services rose by 2.4%, and the prices of dwelling went up by 2.3%. It is estimated that carryover effects of price changes in last year contributed about 1.5 percentage points and new price-rising factors contributed about 0.4 percentage point to the 1.9% year-on-year increase of CPI in June.  

Second, PPI witnesses its growth rate falls back on a month-on-month basis and expands slightly on a year-on-year basis.  

From the month-on-month point of view, PPI started to grow at a slower pace. The prices of means of production rose by 0.4%, down 0.1 percentage point over the previous month; and the prices of means of subsistence remained on par with those in the prior month. In terms of major industries, PPI rose by 4.5%, down 3.0 percentage points over the last month, in the oil and natural gas extraction industry (affected by the movements in prices of international crude oil); PPI increased by 2.3%, down 1.3 percentage points over the previous month in the oil, coal and other fuel processing industry; PPI grew by 1.1%, down 0.2 percentage point over the prior month in the ferrous metal smelting and rolling industry; PPI went up by 0.4%, down 1.1 percentage points in the papermaking and paper products industry; and PPI ascended by 0.2%, down 0.4 percentage point over the last month in the non-metallic mineral products industry. The non-ferrous metal smelting and rolling industry saw its PPI going up by 0.7%, 0.4 percentage point faster than the last month; and the pharmaceutical manufacturing pushed up its PPI by 0.4%, representing an increase of 0.3 percentage point over the prior month.  

From the year-on-year point of view, the PPI growth was 0.6 percentage point higher than that of the last month. The prices of means of production rose by 6.1%, up 0.7 percentage point over the previous month; and the prices of means of subsistence rose by 0.4%, up 0.1 percentage point over the last month. In terms of major industries, the oil and natural gas extraction industry, oil, coal and other fuel processing industry, ferrous metal smelting and rolling industry, non-ferrous metal smelting and rolling industry, chemical raw material and chemical product industry, and coal mining and washing industry all saw their growth rate on the rise, driving up PPI by some 0.49 percentage point on a year-on-year basis together. Two industries generated a growth rate slower than they did the previous month. The papermaking and paper products rose by 11.3%, down 0.5 percentage point over the last month; and the non-metal mine products grew by 10.3%, down 0.3 percentage point over the prior month. It is estimated that carryover effects of price changes in last year contributed about 4.1 percentage points and new price-rising factors contributed about 0.6 percentage point to the 4.7% year-on-year increase of PPI in June.  


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