The annual growth in the consumer price index (CPI) last month hit its highest level since February 2010 because of rising vegetable prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Headline inflation rose 2.03 percent last month from a year earlier, from November’s annual growth of 1.01 percent, with food costs increasing 5.41 percent — the most among the seven main sectors surveyed by the DGBAS.
Vegetable prices increased 48.05 percent last month from a year ago, marking their highest growth since November 2007, as heavy rains cut supplies and drove up costs, DGBAS section chief Wang Shu-chuan (王淑娟) told a press conference.
“Rising vegetable prices drove up headline inflation by 1.01 percentage points last month, almost half of its growth level,” Wang said.
Excluding vegetable prices, CPI growth was a moderate 1.02 percent last month, she said.
Egg prices rose 29.57 percent from a year ago, given a low comparison base last year, while fruit prices dropped 9.68 percent year-on-year, offsetting part of the increase in food prices, the DGBAS said in a report.
Wang said it was hard to tell, based on last month’s data alone, if overall inflationary pressure had expanded. The latest data from the Council of Agriculture showed vegetable prices had gradually stabilized over the past few days, she said.
However, inflation could trend higher this month because of the Lunar New Year holiday, Wang said. A short-term spike in prices usually occurs in the run-up to the holiday, which starts on Jan. 23 this year.
Cheng Cheng-mount (鄭貞茂), chief economist at Citigroup in Taipei, shared Wang’s view that higher vegetable prices could be a short-term phenomenon, but that prices would remain high this month because of the Lunar New Year holiday.
Cheng expected the CPI to rise 2.8 percent this month because of the buying spree.
Since this could lift headline inflation in the first quarter, the central bank is unlikely to cut its policy rates when it meets in March, Cheng said.
The 2.03 percent increase in consumer prices translated into increased costs of NT$1,218 a month for a household with a monthly income of NT$60,000, compared with a year earlier, with food costs rising NT$899, the DGBAS report said.
Growth in core CPI — which excludes vegetable, fruit and energy prices — stood at 1.18 percent last month, compared with 1.24 percent in October, DGBAS data showed.
On a monthly basis, prices were up 0.25 percent last month, but down 0.07 percent after being seasonally adjusted, data showed.
For the full year, inflation rose to 1.42 percent, within the target set by the Council for Economic Planning and Development of growth of less than 2 percent.
The wholesale price index rose 4.32 percent year-on-year last month — the same as its full-year growth last year, the DGBAS said.