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Inflation slightly up last month

Driven by higher oil prices, consumer prices rose slightly last month from a year ago although vegetable and fish prices fell, the government's statistics agency reported yesterday.

Compared with the same month last year, the consumer price index (CPI) edged up 0.41 percent last month, the Directorate-General of Budget, Accounting and Statistics said. Last month's figure dropped 0.29 percent from the previous month.

The core price index, which excludes prices of vegetables and fruits, fishery products and energy, rose 0.66 percent last month from a year earlier and was up 0.03 percent from February, the agency said.

Vegetable prices plunged 29 percent last month from a year earlier, and seafood prices declined 4.5 percent, making the 0.41 percent increase in the CPI last month the slowest pace since January 2004, it said.

"Inflation isn't a concern in Taiwan," said Vickie Hsieh, chief economist at President Securities Corp (統一證券). "That will be a solid reason for the central bank to adopt a relatively looser monetary policy compared to the US."

For the first quarter of the year, the nation's CPI rose 1.35 percent from a year earlier, lower than the 1.4 percent increase reported in China, a 1.5 percent rise in Singapore, a 2.1 percent growth in Hong Kong and a 2.5 percent advance in South Korea, according to the agency's statistics.

The nation's central bank raised its benchmark interest rate by 12.5 basis points to 2.375 percent on March 30 to curb inflation. The Bank, which hopes to keep inflation below two percent this year, has raised the rate seven times since September 2004.

Wholesale prices also rose last month due to the high prices of energy and electrical machinery equipment imports, according to the agency. Last month the wholesale price index increased by 2.02 percent year-on-year and 0.46 percent month-on-month.
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