The nation's inflation rate accelerated at its fastest pace in five months last month after thunderstorms damaged crops, making food more expensive, and as higher oil prices raised transport costs.
The consumer price index rose 1.73 percent last month from a year earlier, the biggest gain since January, after rising a revised 1.59 percent in May, the statistics bureau said in Taipei yesterday. That was more than the median forecast of a 1.6 percent increase in a Bloomberg News survey of 19 economists.
Central banks in Asia, Europe and the US have been raising interest rates to keep surging oil and commodity prices from fanning inflation. Taiwan's central bank last week lifted borrowing costs an eighth straight time, and Governor Perng Fai-nan (彭淮南) said rates are "still some distance away from a neutral level," signaling more increases may come.
"We continue to expect the central bank to hike the policy rate in September," Enoch Fung, an economist at Goldman Sachs in Hong Kong, wrote in a report. "The likelihood of a rate hike in December has also increased as we foresee more pass-through of inflation pressure."
Taiwan's wholesale price index rose 8.71 percent last month from a year earlier, compared with May's revised 6.56 percent increase, the report showed.
The central bank on June 29 raised its benchmark interest rate one-eighth of a percentage point to 2.5 percent, the highest in almost five years. The US Federal Reserve last week boosted its rate for the 17th time to 5.25 percent.
Diesel and fuel costs jumped 15.2 percent last month from a year earlier, according to the statement. The price of food gained 3.48 percent from a year earlier and climbed 2.03 percent from May. Vegetable prices surged 28.78 percent last month from May.
Crop and farmland damage from heavy rains since late May totaled NT$710 million (US$22 million), the Council of Agriculture said on June 12.
"We shouldn't be worried about inflation now. Food prices only went up because of bad weather," said Ming Han Lee, an economist at Grand Cathay Securities (大華證券) in Taipei, whose forecast was the most accurate in the survey. "Inflation will ease in the coming months."
Consumer prices may rise more than 2 percent this year on soaring prices for farm products and commodities, the Chinese-language Commercial Times reported on June 11, citing the Council for Economic Planning and Development.
Also stoking inflation, crude oil prices have surged 24 percent in the past year, according to futures traded in New York.
China Airlines (華航) and EVA Airways Corp (長榮航空), the nation's two largest carriers, on June 7 said they had received government approval to raise fuel surcharges, the third time in about nine months, starting from June 21.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts