The sustained volatility in international oil prices this year has raised questions about its effect on consumer prices in Sichuan. A press conference was held on July 15th to release the province's first-half 2026 livelihood survey data.
It was reported that the Consumer Price Index (CPI) for Sichuan residents rose by 0.9% year-on-year in the first six months, showing a moderate recovery with stable prices for essential goods like food.
The direct impact of higher oil prices on the CPI is primarily seen in energy, transportation, and clothing. Notably, the average price of gasoline increased by 7.3% year-on-year in H1, which is 14.3 percentage points higher than the same period last year. Airfare prices rose by an average of 10.5%, and clothing prices increased by 2.3%, with the growth rate 1.5 percentage points higher than last year.
Overall, however, Sichuan's CPI remained stable. The year-on-year CPI growth entered positive territory starting in February, gradually moving away from its low point. The core CPI increased by 1.3% in H1, marking 16 consecutive months of growth.
Globally, the International Monetary Fund has recently raised its inflation forecast, expecting worldwide inflation to rise to 4.7% this year from 4.1% last year.
Industry experts point out that maintaining stable domestic prices under such circumstances is a significant achievement. Domestic pricing mechanisms and strategic reserves have helped contain the overall impact of international oil price fluctuations on local fuel costs, keeping it limited and manageable.
A notable feature of Sichuan's CPI trend this year is a shift in its primary drivers. The upward pressure has transitioned from being solely driven by service consumption prices last year to a dual force from both goods and services. On one hand, increased demand for leisure, travel, and accommodation has pushed related service prices up by 1.4% year-on-year, contributing 0.7 percentage points to the overall index. On the other hand, global geopolitical conflicts and rising demand from tech industries have increased upstream costs, leading to a 2.2% year-on-year rise in industrial consumer goods prices, which added 0.6 percentage points to the total index.
Pork prices also drew attention, averaging a 14.8% year-on-year decline in the first half. On a month-to-month basis, the trend showed an initial increase, followed by a decrease, and then a narrowing of the decline. The sequential data reflects short-term price movements. Prices rose in January and February due to seasonal Lunar New Year factors, then gradually fell in March and April, before the rate of decline slowed in May and June as hog production capacity adjustments accelerated.
The primary reason for the lower prices is ample pork supply due to a slow reduction in hog production capacity.
Turning to producer prices, 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 in H1 2026, showing signs of stabilization and recovery. The Producer Price Index (PPI) for industrial products rose by 0.6% year-on-year, a 3.4 percentage point improvement from the full year 2025. The Industrial Purchasing Price Index (IPI) increased by 6.2% year-on-year, up 9.8 percentage points from 2025, indicating a continued recovery signal in industrial sector pricing.
Three sectors—non-ferrous metal smelting and rolling, electronic information, and basic chemical raw material manufacturing—saw significant price increases, serving as the main pillars supporting the PPI's stabilization and improvement.
For instance, accelerated construction of AI computing infrastructure and sustained demand for servers and memory chips, coupled with steady growth in demand from sectors like new energy vehicles, have driven up prices in the electronic information industry. Prices for electronic components and specialized materials manufacturing rose by 28.2% year-on-year, while lithium battery materials surged by 46.5%.
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