Group 1: CPI and Core CPI Trends - In May, the CPI decreased by 0.1% year-on-year, maintaining the same decline as the previous month[10] - The core CPI year-on-year growth rate recorded 0.6%, an increase of 0.1 percentage points from last month[10] - The CPI month-on-month growth rate turned negative at -0.2%, a decrease of 0.3 percentage points from the previous month[10] Group 2: Energy Prices Impact - Energy prices fell by 1.7% month-on-month and decreased by 6.1% year-on-year, contributing approximately 0.13 and 0.47 percentage points to the CPI decline, respectively[10] - The oil and gas extraction industry saw prices drop by 5.6%, while refined petroleum product manufacturing prices fell by 3.5%[28] - The coal mining industry experienced a price decline of 3.0%, with coal processing prices down by 1.1%[28] Group 3: PPI Trends - The PPI year-on-year growth rate recorded -3.3%, with a decline of 0.6 percentage points compared to last month[24] - The PPI month-on-month decline remained at -0.4%, consistent with the previous month[26] - Production material prices decreased by 4.0% year-on-year, while living material prices saw a decline of 1.4%[24] Group 4: Consumer Demand and Price Changes - Consumer demand showed marginal improvement, with seven major categories of prices rising, except for transportation and communication, which fell by 4.3%[10] - Food prices decreased by 0.4% year-on-year, with fresh vegetables and eggs contributing to the decline[17] - Hotel accommodation and tourism prices increased by 4.6% and 0.8%, respectively, exceeding seasonal levels[20]

Core Insights - In April, the Consumer Price Index (CPI) shifted from a month-on-month decline of 0.4% to an increase of 0.1%, while the year-on-year CPI decreased by 0.1%, maintaining the same decline as the previous month [1][4] - The core CPI increased by 0.2% month-on-month and rose by 0.5% year-on-year, indicating stable growth [1][8] - The Producer Price Index (PPI) decreased by 0.4% month-on-month and fell by 2.7% year-on-year, with the decline expanding by 0.2 percentage points compared to the previous month [1][17] CPI Analysis - The month-on-month increase in CPI was primarily driven by a rebound in food prices, which rose by 0.2%, exceeding seasonal levels by 1.4 percentage points, and a notable recovery in travel service prices due to demand recovery and holiday effects [6] - Year-on-year, the CPI decline was influenced by a drop in energy prices, which fell by 4.8%, with gasoline prices decreasing by 10.4%, contributing approximately 0.38 percentage points to the year-on-year CPI decline [7] - The stable growth of core CPI reflects the resilience of the domestic economy, supported by a recovery in travel demand and the impact of consumption promotion policies implemented since last year [3][8] PPI Analysis - The PPI's month-on-month decline was consistent with the previous month, influenced by international input factors and seasonal declines in domestic energy prices [17] - Despite the overall decline, some industrial sectors showed signs of improvement due to enhanced demand and the implementation of consumption-boosting macro policies, leading to price increases in certain areas [17][18] - The ongoing development of high-tech industries is expected to positively impact related sector prices, contributing to a potential recovery in PPI [18] Future Outlook - Market analysts generally anticipate a moderate recovery in CPI in the upcoming period, supported by new incremental policies aimed at boosting consumption [11][13] - The focus on expanding domestic demand and enhancing consumption is expected to lead to a gradual increase in core CPI from its current low levels [14]

Core Viewpoint - The article discusses the current state of China's Consumer Price Index (CPI) and Producer Price Index (PPI), highlighting a slight decrease in both indices, indicating ongoing deflationary pressures in the economy. It emphasizes the need for effective demand stimulation and policy coordination to enhance economic recovery and stabilize prices. CPI Analysis - In April 2025, the CPI year-on-year change was -0.1%, consistent with the previous value, while the PPI year-on-year change was -2.7%, lower than the previous -2.5% [1][7] - The CPI month-on-month change was 0.1%, an improvement over the negative growth seen in February and March. Key price increases were driven by reduced imports affecting beef prices, increased travel activity during the May Day holiday, and rising gold prices [8][9] - Beef prices rose by 3.9% month-on-month in April, with the year-on-year decline narrowing by 5.9 percentage points. Travel-related costs, including airfare and accommodation, saw significant increases, contributing approximately 0.10 percentage points to the CPI month-on-month [8][9] PPI Analysis - The PPI month-on-month change was -0.4%, unchanged from March. Input price pressures remain significant, particularly in the oil and gas extraction sector, which saw a month-on-month decline of 3.1% [10][11] - The steel industry continues to face the necessity of capacity reduction, with black metal smelting prices decreasing by 1.0% month-on-month. The construction sector supports cement prices, while the automotive industry experiences ongoing price declines due to technological advancements and market competition [10][11] - The article anticipates that the PPI year-on-year decline may continue to widen due to elevated bases from May to July and external demand pressures affecting capacity utilization in certain industries [4][12] Policy Implications - The People's Bank of China (PBOC) emphasizes that the relationship between money supply and prices is complex and depends on supply-demand dynamics. Effective demand stimulation is crucial for price recovery, necessitating coordinated policies across various sectors [5][14] - The article suggests that optimizing the supply-demand ratio is essential for positive effects from monetary policy expansion. Key policy paths include boosting consumption, stabilizing local investment, and promoting technological and industrial innovation [6][15]