Recently, the Taicang price bureau published CPI (consumer price index) data for the first half of 2013. According to the data, the CPI rose 1.6 percent, 1.7 percent, 1.2 percent, 1.6 percent, 1.1 percent and 2.1 percent from January to June each month, respectively.

Drop in meat and poultry prices brings down CPI According to the average level of consumption, the price drop of foodstuff is the primary cause for the decrease in CPI. The gains of foodstuff in 2013 have decreased by 2.6 percent in contrast to last year. The exact cause is the drop in meat and poultry prices. Influenced by the bird flu, the gains in meat and poultry prices have decreased from 5.5 percent last year to -5.9 percent this year, resulting in a decrease of 2.4 percent for foodstuff. The 0.8 percent decrease in CPI is due to the drop in foodstuff prices, moreover, meat and poultry accounted for 0.74 percent,of this decrease.

In terms of macroeconomics and policy adjustments, the slowing global economic recovery and transforming industrial structure of China will prevent depression or intense inflation similar to what happened a few years ago. On the contrary, the price will stay relatively stable.

CPI may rise in the second half of 2013 Although the gains of commodity prices continue to decline, it does not mean there will be a decrease of commodity prices. Taking the past few years into consideration, the commodity prices are on a blatant rise. The accumulating rise of prices is still a pressure on resident living costs.

If economic growth doesn’t change greatly and monetary policy remains unchanged, it can be estimated that commodity prices will stay steady in the second half of 2013. However, with the disappearance of the bird flu, the lowered prices will rise due to the supply and demand relationship, including the price increase of meat and poultry. What’s more, the increase in price in the second half of 2013 will increase by 1.4 percent in contrast to that of last year.