The reason behind this price increase is not inflation but deflation. Since 2020, there has been a lot of liquidity in the market, but in February, China's CPI dropped to 1%, showing signs of deflation. In this case, why did the price soar?
According to analysis, there are three reasons:
First, the price of commodities is often affected by the relationship between market supply and demand. This year's music festival is typical. Cattle call it "terror", and the income of tourism industry drops rapidly. Now, people's travel demand is rapidly released, the market demand is large, and the price is correspondingly increased.
Second, the price increase of some commodities is caused by the increase of raw materials and costs. For example, bottled water, because the international oil price continued to be high last year, the procurement cost of plastic materials such as PET increased, and the cost of packaging materials also increased. Price increases can force businesses to make improvements to some extent.
Third, people with different needs in different regions have different perceptions of prices. People pay attention to the narrow range of commodity price increases, while CPI includes all aspects of consumer spending. The CPI index of Beijing and Shanghai is higher, while that of Guizhou is lower.
With the development of economy and the change of people's consumption concept, price is no longer the only indicator for consumers to judge, but more attention is paid to the quality of food, dining environment and supporting services. In addition, we should see that the rise of some commodity prices has also brought about the recovery of tourism and catering industry. Only by increasing market flow and injecting funds into entities can we promote economic development.
To sum up, in the discussion of rising prices, we should look at various factors objectively and pay attention to the quality and service of consumption, so as to effectively enhance the consumption experience.