Taiwan's consumer prices fell last month because of lower package holiday costs and reduced fruit prices following a bumper harvest, according to government data released yesterday.
The consumer price index fell 0.55 percent last month from October, following a 1.7 percent decline the previous month, according to the Directorate General of Budget, Accounting and Statistics.
For the 11 months of this year, CPI was down 0.29 percent, the directorate said.
"When we have deflation, it's not good," said Prakash Sakpal, an economist at ING Bank NV in Hong Kong. "It says consumers are not spending and that could have a dampening effect on GDP growth."
Consumer prices are falling as retailers try to lure consumers at a time when the unemployment rate is at a near-record high. Taiwan companies have been expanding production in China where land and labor costs are lower, creating fewer new jobs at home.
The government predicts the economy will grow 3.27 percent this year. Last year, gross domestic product contracted 2.18 percent, the nation's worst ever slump.
Food and drink costs, which account for about a quarter of the consumer price index, fell 0.03 percent in November from October, and dropped 2.48 percent from a year earlier, today's report showed.
Housing rentals, which make up about a fifth of the index, fell 0.04 percent. Gas, electricity and water costs rose 0.4 percent. Clothing prices rose 0.64 percent. Gasoline and transport fuel prices rose 0.19 percent from the previous month.
The state-owned dominant oil company, Chinese Petroleum Corp (
The wholesale price index in November fell 0.42 percent from a month ago, but rose 3.09 percent from a year earlier, the statistics agency said.
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