How have the high fluctuations in international oil prices this year and the resulting increase in energy costs affected consumer prices in Sichuan? This question was addressed during a press conference held on July 15th regarding Sichuan's first-half-of-2026 livelihood survey data.
The data revealed that Sichuan's Consumer Price Index (CPI) rose by 0.9% year-on-year in the first half of the year, indicating a moderate recovery with stable prices for essential goods like food.
The direct impact of rising oil prices on the CPI was most evident in the energy, transportation, and apparel sectors. Notably, the average price of gasoline increased by 7.3% year-on-year, which is 14.3 percentage points higher than the same period last year. Airfare prices saw an average increase of 10.5%, a jump of 20.6 percentage points compared to the previous year. Clothing prices also rose, averaging a 2.3% increase, up 1.5 percentage points from last year's rate.
Despite these increases, Sichuan's overall CPI remained stable. The year-on-year CPI growth entered positive territory starting in February, gradually moving away from its lowest levels. The core CPI increased by 1.3% in the first half and has now maintained a rising trend for 16 consecutive months.
This domestic price stability is noteworthy given that the International Monetary Fund (IMF) has recently raised its global inflation forecast, expecting it to rise to 4.7% this year from 4.1% last year. Experts point out that domestic pricing mechanisms and strategic reserves have helped contain the overall and controllable impact of international oil price volatility on local fuel costs in Sichuan.
A key feature of Sichuan's CPI performance this year has been a shift in its driving forces. The upward pressure is no longer coming solely from service consumption prices, as was the case last year, but is now a combined effect of both goods and services. Strong demand in areas like leisure, travel, and accommodation has pushed service prices up by 1.4% year-on-year, contributing 0.7 percentage points to the overall index.
Concurrently, factors such as global geopolitical conflicts and increased demand from the tech industry have raised upstream costs. This has led to a 2.2% year-on-year increase in the prices of industrial consumer goods, which added 0.6 percentage points to the total index.
Pork prices, a closely watched metric, saw an average year-on-year decline of 14.8% in the first half. On a month-to-month basis, the trend showed an initial rise followed by a decline, with the rate of decrease narrowing later. Prices increased in January and February due to seasonal holiday demand, then gradually fell in March and April. The month-on-month declines moderated in May and June as the pace of reducing hog production capacity accelerated. The primary reason for the low price level remains ample pork supply due to a slow drawdown in production capacity.
Turning to industrial producer prices, the first half of 2026 saw a recovery. Influenced by fluctuations in international commodity prices, accelerated demand from new quality productive forces, and sustained pro-growth policies, Sichuan's industrial producer prices exited a downward trend and began to stabilize and recover.
The Producer Price Index (PPI) for industrial products increased by 0.6% year-on-year, a significant rebound of 3.4 percentage points from the full-year 2025 figure. The Industrial Producer Purchase Price Index (IPI) rose by 6.2% year-on-year, rebounding by 9.8 percentage points from 2025, signaling a continued warming in industrial sector prices.
Price increases in three major industries were the main drivers behind the PPI's stabilization and improvement: non-ferrous metal smelting and rolling processing, the electronic information industry, and basic chemical raw material manufacturing. For instance, accelerated construction of AI computing infrastructure and sustained demand for servers and storage chips, coupled with steady growth in supporting demand from sectors like new energy vehicles, have driven up prices in related electronic information sectors. Prices for electronic components and specialized electronic materials manufacturing surged by 28.2% year-on-year, while lithium battery materials saw a sharp increase of 46.5%.
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