In the second half of China's price may slow up next year or face big inflation

Agency forecast June CPI decline for the 3rd consecutive month narrowed just into the second half of the year, the research institutions have to release forecasts of the current price trend. Overall, most of the view is that June China's consumer prices (CPI) will be the 5th consecutive month of negative growth, the decline of about 1.3%. But as the decline shrinks, prices are likely to pick up slowly in the second half.　　Even some experts believe that next year our country may again face the situation of big inflation.　　June CPI or Drop 1.3% Senior macro analyst Tang Jianwei of the Bank of communications forecast that CPI year-on-year growth in June will be negative for the 5th consecutive month. He said that June food prices continue to fall slightly, while the tail-cutting factor will pull down the price of 1.3%, still dominate the June CPI continued to fall the main reason.　　According to data measured by the Ministry of Agriculture and the Ministry of Commerce, we think the June CPI growth was between 1.5% and 1.1%, taking the number of digits and predicting a year-on-year increase of about 1.3% per cent for the CPI in June.　　Societe Generale Securities chief macro analyst Dongxiangan also predicted that June CPI year-on-year decline of about 1.3%, but the elimination of seasonal factors, the CPI quarter-on-quarter Trend stable. The same view also holds the Guotai fixed Income senior analyst Lin Chaohui.　　He believes that June pork prices have been higher for two consecutive weeks, but the price of vegetable prices fell sharply, the June CPI is expected to fall by 0.3% per cent, the year-on-year decline of about 1.5%.　　The report, published by the Shanghai Securities, found that CPI fell by 1.5% in June Year-on-year, down 0.1% from 1.4% last month, and the PPI fell by about 7.5% per cent year-on-year. Four-quarter or current growth if the agency is right, the CPI fell 1.3% Year-on-year in June, the 3rd consecutive month since April. Tang Jianwei that although the first half of the CPI negative growth has become a foregone conclusion, but to the second half, the tail factor will gradually weaken, domestic economic recovery will push up prices, domestic food prices chain has been rising for five consecutive months, housing prices with the real estate recovery will gradually upward, domestic product prices will be transmitted to the CPI,　　All of these factors could push the CPI to pick up in the second half.　　At the same time, the recent sustained rise in global oil and other commodity prices, coupled with the rich countries "quantitative easing" monetary policy, liquidity, and so on, the momentum of the rebound in prices has gradually increased, thus strengthening people's expectations of future inflation.　　Tang Jianwei said, if there is no sudden impact, the three-quarter domestic CPI is expected to fall to narrow, in the four quarter may be removed "negative" hat, the year there is a big increase in prices is not likely.　　Dongxiangan also believes that by the end of this year, CPI will rise year-on-year. However, Zhejiang Merchants Securities macroeconomic researcher Tao Jinggang that the CPI will begin to rebound in October, the trend of negative CPI growth has so far not changed. He said the new price factor will begin to become a shadow in May 2009The main factor of the CPI.　　At present, seasonal factors will make the CPI chain in September before still negative growth. A consensus has been reached in the academic community over the second half of the year, whether the price will be rising or not, and the gradual stabilisation of the latter part of the year. Will the fast-growing inflation, which is familiar and repugnant, also follow? The chief economist for China International Finance, HA, thinks it will.　　He said inflation in China and other developing countries was much earlier than in the US and that inflation in China would come true next year. According to his analysis, international commodity prices have risen sharply since this year. In China, CPI has reacted sharply to global commodities because it accounts for up to 34% of food in its composition. A sharp rise in food prices is bound to have a big impact on China.　　In addition, China's CPI, investment goods accounted for a higher ratio, and investment goods are also affected by international commodity prices. Hong Kong scholar Lang Ping also holds a similar view. "There is a lot of potential for stagflation in China next year," he said.　　"Because China's manufacturing is the import of raw materials, imports of machinery and equipment after the rough, the recent collapse of imports of data means that domestic entrepreneurs in the economic deterioration of the environment" do not want to do. But this view is controversial.　　Wanguo Chief macro analyst Li Huiyong that the likelihood of hyperinflation within two years is slim, and prices are more likely to show a moderate rebound. There are two reasons: one is that economic growth, while the bottom is rebounding, is still below the potential growth rate and the output gap remains negative. The second is that only when a large number of currencies in the form of cash or demand deposits, such as the existence of a trading currency, prices will face a higher upward pressure. According to the current situation, the proportion of demand deposits to corporate deposits is still significantly below the level of inflation in 2007-2008, and the scissors of M1 and M2 growth rates are still negative and remain at their lowest level in recent years. "Prices are unlikely to rise sharply until this situation has changed," he said. "he said.