Group 1: CPI Analysis - The CPI year-on-year growth rate decreased to -0.7% in February, down 1.2 percentage points from the previous month, primarily due to the impact of the Spring Festival timing [1][4] - Excluding the Spring Festival effect, the CPI year-on-year increased by 0.1% in February, indicating a moderate recovery in prices [1][4] - Food prices contributed over 80% to the total decline in CPI, with fresh vegetable prices dropping by 12.6% year-on-year [5][6] Group 2: PPI Analysis - The PPI year-on-year decline narrowed to 2.2% in February, with the average for January-February also showing a 2.2% decrease compared to the previous year [2][7] - The main reasons for the PPI decline include the off-peak industrial production season and weak demand for construction materials [2][7] - The prices of production materials fell by 2.5%, while living materials prices decreased by 1.2%, with specific industries like coal processing seeing significant price drops [7][8] Group 3: Market Sentiment and Future Outlook - The PMI data indicated an increase in raw material and finished product price indices, but the PPI only slightly narrowed, suggesting a discrepancy between perceived and actual market conditions [3] - The current policy uncertainty may lead to a cautious approach from enterprises, affecting production enthusiasm [3] - Positive signals from the upcoming Two Sessions may help restore market demand and improve production and demand dynamics [3]

Core Viewpoint - The Consumer Price Index (CPI) in February showed a month-on-month decrease of 0.2% and a year-on-year decrease of 0.7%, influenced by factors such as the timing of the Spring Festival and fluctuations in international commodity prices [1][2]. Group 1: CPI Analysis - The CPI's year-on-year decline in February is attributed to a high comparison base from the previous year due to the Spring Festival, which caused significant price increases in food and services [1]. - The CPI's year-on-year change of -0.7% includes a lagged impact from last year's price changes of approximately -1.2 percentage points, while this year's new price changes contributed about 0.5 percentage points [2]. - Food prices decreased by 3.3% year-on-year, accounting for over 80% of the total decline in CPI, with significant impacts from airfare and tourism prices, which fell by 22.6% and 9.6% respectively [2]. Group 2: Contributing Factors - Favorable weather conditions in February facilitated the growth and transportation of fresh vegetables, leading to a year-on-year price drop of 12.6%, which contributed approximately -0.31 percentage points to the CPI decline [2]. - Promotional price reductions in automobiles, with fuel and new energy vehicles seeing year-on-year price drops of 5.0% and 6.0% respectively, also contributed to the CPI's decrease by about -0.16 percentage points [2].