Consumer prices rose at a slower pace last month, as food costs and services fees eased after the Lunar New Year holidays.
The consumer price index rose 0.99 percent last month from a year earlier, the statistics bureau said in a statement in Taipei yesterday. This compares with the 2.67 percent increase year-on-year in January.
Faster-than-expected economic growth and rising energy prices prompted Taiwan's central bank to raise rates in each of its past six quarterly rate-setting meetings. In-flation may slow this year as an increase in credit card debt forces some consumers to pare spending, said economist Forest Chen.
"I see slower inflation this year because private consumption should be weak on the emerging credit card debt problems," said Chen, chief economist at Taiwan Securities Investment Advisory (
Chen said he expects the central bank to raise its benchmark interest rate by 0.125 percentage points in its meeting this month and in June.
The government last month raised its forecast for economic growth this year.
Rising defaults forced banks in Taiwan to write off NT$210.8 billion (US$6.5 billion) in bad loans and card purchases last year, up 30 percent from 2004, according to statistics on the Web site of Taiwan's Financial Supervisory Commission.
The default loan ratio on credit cards rose to 2.4 percent at the end of December from 2 percent a year earlier, the commission said.
American Express Co last month stopped issuing new cards in Taiwan amid concerns about rising bad debts. Taiwanese on average own two credit cards per person, up from one five years ago.
On a month-on-month basis, consumer prices fell 0.99 percent from January, the bureau said.
Wholesale prices gained 2.07 percent from a year earlier but slid 0.83 percent from January. Vegetable prices rose 2.7 percent in February from a year earlier but fell 15 percent from the previous month. Clothing prices dropped 4.9 percent from a year ago and fell 6 percent from January, it said.
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