The nation's consumer price index (CPI) fell 0.57 percent in August from a year earlier on declining vegetables and clothing prices, the Directorate General of Budget, Accounting and Statistics (DGBAS) said yesterday.
It was the first drop since December 2003. Compared with July, the figure was down a seasonally adjusted 0.47 percent month-on-month, the DGBAS said.
"The CPI fell year-on-year in August mainly owing to less expensive vegetable and fruit prices," said DGBAS section chief Wu Chung-ming (吳昭明). "Taiwan was lucky to have been spared the direct impact of quite a few typhoons this year."
The August core price index, which excludes food and energy prices, was up 0.38 percent from a year earlier but down 0.31 percent from July.
"Without the disruption of typhoons, vegetable and fruit prices are likely to stay low and in turn ease pressure on the CPI next month," Wu added.
Slowing inflation eases pressure on the central bank to raise borrowing costs that are already at a five-year high. Consumers, stung by higher interest rates, energy costs and credit card bills, have been reining in spending, causing the economy to cool in the most recent quarter.
The central bank on June 29 raised its benchmark interest rate by 25 basis points to 2.5 percent. The next quarterly monetary policy meeting will be held on Sept. 21.
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