Mon, Jul 23, 2007 - Page 12 News List

Executive Yuan moves to fight inflation


The Executive Yuan is planning to introduce a new oil policy in a bid to arrest spiraling inflationary pressures, after the Ministry of Economic Affairs convenes a supra-division meeting today.

The meeting is expected to explore the feasibility of restraining prices of imported primary metals, grains and other commodities and importing cheaper primary commodities to help lower inflation.

However, the moves have been criticized by several economists, with Taiwan Thinktank chairman Chen Po-chih (陳博志) saying that commodity prices as a whole are an economic issue and the government's intervention in market mechanisms will cause even bigger problems in the long run.

Chen said consumers inability to cope with inflation was a social issue which should not be solved by economic means.

Liang Chi-yuan (梁啟源), a research fellow at the Institute of Economics at the Academia Sinica, said inflationary pressure was not caused by rising commodity prices, but by the widening wealth gap between the rich and poor.

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