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Nation's consumer price index falls as shoppers stay home

Consumer prices in Taiwan rose 0.31 percent last month from the year before mainly due to a rise in vegetables and fruit prices, official data showed yesterday.

However, the consumer price index (CPI) fell a seasonally adjusted 0.33 percent last month compared with the previous month.

The drop is attributed to the SARS epidemic keeping consumers at home, prompting stores, restaurants and travel agencies to discount to try and lure customers out, the Directorate General of Budget, Accounting and Statistics said.

In the five months to May, CPI fell 0.09 percent.

The wholesale price index last month rose 1.69 percent from a year earlier.

The index fell a seasonally adjusted 0.9 percent last month from April and rose 1.7 percent from a year earlier, the statistics agency said.

"May is the month when you see the strongest impact of SARS," Lian Chia-liang, an economist at J.P. Morgan Chase & Co in Singapore said.

"There's a bit of pressure in terms of consumer confidence," Lian said.

"In the last few days people have been starting to go out, so consumer spending will gradually start recovering," Ku Pin-jan (辜炳珍), deputy director of the statistics bureau told reporters.

"The progress made in containing SARS has been as expected," Ku said.

Outbound tour packages prices dropped 5 percent last month from the previous month, the cost of movie tickets dropped 4.7 percent and local hotel room prices slid 9.2 percent, Ku said.

Clothing prices fell 2.1 percent last month, while housing rentals, which make up about a fifth of the index, were unchanged.

Transport fuel prices fell 1.4 percent, reflecting the slide in crude oil prices from a 12-year high in March.

The cost of food and drinks, which accounts for about a quarter of the consumer price index, rose 1.2 percent last month.

The government predicts consumer prices will fall 0.1 percent this year after a 0.2 percent decline last year.
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