Consumer prices stay mild
China's consumer price index rose 0.5% year on year in July 2026 and slipped 0.1% from June, the National Bureau of Statistics (NBS) reported on August 9. Urban prices increased 0.5% and rural prices 0.4%. Food prices fell 1.5% from a year earlier while non-food prices gained 0.9%; consumer goods rose 0.2% and services 0.7%. Averaged over the first seven months of 2026, the CPI stood 0.9% above the same period of 2025.
Core CPI, which excludes food and energy, rose 0.9% year on year and 0.3% month on month. Dong Lijuan, chief statistician at the NBS city department, said consumer prices maintained mild growth overall, with the monthly decline narrowing by 0.2 percentage point from June, but noted that imported price factors weighed on the headline number.
Fuel drags, pork rebounds
The month-on-month picture was dominated by energy. Weaker international oil prices pushed domestic gasoline prices down 10.7% in July, a drop 5.8 percentage points steeper than in June, subtracting roughly 0.35 percentage point from the monthly CPI.
Food prices were flat month on month, about 0.6 percentage point below the usual seasonal pattern. Fresh vegetables rose 1.3% and egg prices fell 2.1%, both well short of seasonal norms. Heavy summer supply pushed fresh fruit prices down 3.8%, trimming about 0.07 percentage point from the index. Pork swung from a 0.8% decline in June to a 4.1% gain in July as hog capacity-control measures took effect and extreme heat and heavy rainfall raised transport costs, adding roughly 0.07 percentage point.
Artificial intelligence also left a mark on the consumer basket. Tablet computers rose 11.3%, computers 5.5% and mobile handsets 1.0% month on month as AI-driven product upgrades lifted demand, together contributing about 0.03 percentage point to the CPI.
Key July 2026 price indicators
| Indicator | Year on year | Month on month |
|---|---|---|
| CPI | +0.5% | -0.1% |
| Core CPI | +0.9% | +0.3% |
| Food | -1.5% | 0.0% |
| Non-food | +0.9% | -0.1% |
| Services | +0.7% | +0.4% |
| PPI | +3.5% | -0.7% |
| Producer purchasing prices | +5.5% | -1.0% |
Producer prices lose momentum
The producer price index rose 3.5% from a year earlier, down 0.6 percentage point from June, and fell 0.7% month on month. Purchasing prices for industrial producers climbed 5.5% year on year but declined 1.0% on the month. Over January to July, the PPI averaged 1.8% above a year earlier and purchasing prices 2.8% higher. The NBS attributed the softening to imported and seasonal factors, even as demand improved in some domestic industries.
What it means for policy
- Core inflation below 1% leaves ample room for the moderately loose monetary stance the People's Bank of China reaffirmed for the second half of 2026.
- Both readings undershot market forecasts, according to Caixin, and the PPI ended a run of steady year-on-year improvement from a high base.
- Nominal growth remains the weak spot in an economy that expanded 5.0% in the first half but slowed to 4.3% in the second quarter.
Attention now turns to July credit and money supply data, where brokerage forecasts compiled in early August pointed to aggregate social financing of roughly 1.6 trillion yuan and M2 growth easing to about 7.7%. With prices soft and volumes uneven, economists expect fiscal instruments rather than sharp rate cuts to carry the near-term burden of supporting demand.