Galaxy Securities: Food prices rebound driving the month-on-month CPI to turn positive in July, inflation to continue mild trend in the second half of the year

In July, the CPI rose by 0.5% month-on-month and 0.5% year-on-year, with food prices rising by 1.2% month-on-month and non-food prices rising by 0.4%. The PPI fell by 0.2% month-on-month and 0.8% year-on-year. The rise in vegetable, egg, and pork prices drove the food prices to turn positive on a monthly basis, while the demand for summer travel boosted non-food prices beyond seasonal trends. Prices of upstream oil, gas, and non-ferrous metals rose. In the second half of the year, overall pork prices are expected to rise, but the possibility of a significant increase is small. Service consumption expenditure will help drive core CPI upwards. Policy efforts are needed for PPI to rebound