Tue, Dec 07, 2010 - Page 12 News List

Inflation hits nine-month high

PASSING IT ON:The higher costs from a delayed harvest and global prices of gold prompted businesses to charge consumers more on purchases across the board

By Crystal Hsu  /  Staff Reporter

Inflation last month climbed to a nine-month high compared with a year earlier as retailers passed on cost increases to consumers amid recovering demand, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

The consumer price index (CPI) increased for a third straight month by 1.53 percent last month from a year ago, marking the highest level since February when inflation grew at an annual rate of 2.34 percent, DGBAS statistics showed.

Prices increased across-the-board, including food, clothing, entertainment and transportation costs, the DGBAS said.

On a monthly basis, the inflationary reading gained 0.21 percent last month, bringing average inflation in the first 11 months of the year to 0.94 percent, the statistics agency said.

“The CPI gained 1.53 percent in November from a year earlier on rallies in the price index for all seven categories of commodities,” DGBAS section chief Wu Chao-ming (吳昭明) told a media briefing.

As costs increased, retailers began passing the burden to consumers, Wu said, adding that a low base last year contributed to the gain in the latest CPI data.

Food costs posted the biggest increase of 3.65 percent last month from the year-earlier level because a delayed harvest pushed up vegetable prices by 26.21 percent while fishery products costs gained 7.54 percent, the report said.

The clothing sub-index increased 1.58 percent year-on-year last month as retailers offered fewer discounts amid the economic recovery and sustained price hikes in gold and jewelry prices, the report said.

The entertainment and transportation sub-indexes grew 1.14 percent and 0.37 percent respectively from a year earlier because of rising costs, the report said.

The CPI is expected to remain relatively high on growing demand ahead of the Lunar New Year, Wu said.

However, he shrugged off concern about further inflationary pressure once the US introduces a third round of quantitative easing, saying the CPI was likely to stay benign in the foreseeable future.

The inflation reading is expected to rise 1.85 percent next year, below the 2 percent threshold, Wu said, citing the statistics agency’s forecast last month.

Core CPI, used to observe long-term inflationary trends, as it excludes the volatile prices of produce and energy, rose 0.91 percent from a year earlier, also the highest since February, the report said.

Wu said the measure remained well under control although a bit high compared with other months of the year. Core CPI has risen 0.4 percent so far this year, the report said.

The wholesale price index gained 2.43 percent last month from a year earlier, decelerating from 3.7 percent in October, the report said. Rising international oil and raw material prices continued to push up the index, but a stronger local currency muted the impact somewhat, Wu said.

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