Tue, Oct 07, 2008 - Page 12 News List

Inflation slows as oil prices fall

DECELERATING TREND A DGBAS official said CPI growth seemed to have peaked in July and has trended down in the past two months in line with the global trend

By Crystal Hsu  /  STAFF REPORTER

Inflationary pressures eased further last month, with the growth in consumer prices decelerating to 3.09 percent year-on-year, from 4.78 percent in August, thanks to falling fuel and raw material prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

It is the second consecutive month that growth in the consumer price index (CPI) slowed after peaking in July, when the adjusted CPI hit a record high of 5.81 percent in 14 years.

“The CPI gained 3.09 percent last month, compared with a year ago,” DGBAS section chief Wu Chao-ming (吳昭明) told a press briefing. “Despite the rise, inflation appeared to have peaked in July and has headed gradually down in the last two months in line with the global trend.”

Wu said Typhoon Sinlaku, which hit the county on Sept. 13 and Sept. 14, had a limited impact on vegetable prices, which dropped 16.09 percent from the previous year.

The impact of Super Typhoon Jangmi, which battered the country on Sept. 28, will be reflected in the inflation report this month, Wu said, adding that he believed it would not push up the index very much.

“It is true that vegetable prices jumped noticeably following Super Typhoon Jangmi,” Wu said. “But they’re expected to return to normal levels in mid-October, and the hikes will be more than offset by falling oil and raw material prices.”

Crude oil soared to US$145 a barrel in July but has dropped to less than US$100 a barrel since then, Wu said, adding that corn, soybean and wheat prices have plunged 40 percent.

Food costs continued to top the price hikes at 5.62 percent last month, followed by transportation and entertainment costs, which advanced 3.42 percent and 1.84 percent respectively, the DGBAS report showed.

Core CPI, which excludes fuel, fruit and vegetable prices, climbed 3.25 percent from a year ago, the report said.

Growth in the wholesale price index also decelerated to 6.64 percent year-on-year last month, from 9.57 percent in August.

Wu said the numbers showed a decelerating trend in inflation, which rose by 4.1 percent in the first nine months of this year.

He voiced optimism that the trend would hold out despite the 14.5 percent hike in electricity rates starting this month.

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