The New Price Increases &Nbsp, And The Overall Downward Trend In Prices Remains Unchanged.

Statistics released by the National Bureau of Statistics yesterday showed that in March Consumer price index ( CPI ) an increase of 3.6% over the previous year, rising by 0.2%. Although this figure is higher than previous market expectations, analysts say that with the gradual decline of vegetable prices, the CPI will also fall in the two quarter. Inflation will not rise in the first half.

The rise in food prices is the main reason for the rise of CPI, and vegetable prices instead of pork have become the main drivers. Data show that in March, food prices rose by 7.5% over the same period last year, affecting CPI's rise of about 2.39 percentage points over the same period last year. Among them, pork prices rose 11.3%, affecting CPI rose by about 0.35 percentage points, fresh vegetable prices rose 20.5%, affecting CPI rose by 0.64 percentage points.

However, the latest monitoring data of the Ministry of Commerce showed that vegetable prices began to drop gradually in the early March and early April, and pork prices fell for ninth weeks in a row. The market operation Department of the Ministry of Commerce said that in April, with the warmer temperatures, the market supply increased, and a large number of new seasonal vegetables were concentrated on the market. Prices would stabilize and fall.

Although vegetable prices appear to be on a downward trend, the sound of rising prices of edible oil and daily necessities will rise again, and the impact of rising oil prices on prices will become increasingly apparent. Facing the new price increase factor, CPI trend is worrying, but many analysts have indicated that the trend of overall price decline has not changed.

"The overall trend of inflation downward this year is not affected by the CPI data in March," said Peng Wensheng, chief economist at CICC. The CPI growth will linger around 3.5% in the next two months, and will drop significantly again in 6-7 months.

Dong Xianan, chief economist of Beijing leading international financial corporation, also believes that "CPI will continue to fall in the future because of the base number. Inflation pressure has been released in the two quarter. Inflation is unlikely to rise in the first half."

It is worth noting that in March Industrial Producer Price Index ( PPI A 0.3% decline in the same period, which is the first negative growth of PPI since December 2009.

"On the one hand, this shows that the trend of inflation has not changed. On the other hand, it reflects the fact that the real economy is not optimistic." Qu Hongbin, chief economist of HSBC China, said.

Turning to the direction of monetary policy in the future, Peng Wensheng also said that the price rebound in March may lead to the reverse cycle operation of short-term policies less than expected, but the probability of lowering the deposit rate in April is still greater.