Tue, Feb 07, 2012 - Page 12 News List

CPI growth hits highest in more than two years

HOLIDAY EFFECT:The recent Lunar New Year holiday period helped drive up consumer prices. The rise in food costs was driven by vegetable prices’ 42% jump

By Amy Su  /  Staff Reporter

The annual growth in the consumer price index (CPI) last month hit its highest level since October 2009 because of higher vegetable prices and an increase in travel spending during the Lunar New Year holidays, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

Core CPI, which excludes vegetable, fruit and energy prices, rose at an annual rate of 1.86 percent last month, quickening from the 1.17 percent annual growth rate in December, according to DBGAS.

Increase in headline inflation rose to 2.37 percent last month from a year earlier, compared with an annual growth of 2.01 percent in December, the DBGAS said. Food costs climbed 4.54 percent year-on-year, marking the fastest pace among the seven main sectors surveyed by the statistics agency.

The 2.37 percent increase in consumer prices translated into an increase of NT$1,422 in costs per month for households with expenditures of NT$60,000 per month, with food costs rising by NT$755, the DGBAS said in a report.

“The Lunar New Year was a seasonal factor bringing consumer prices up last month,” DGBAS section chief Wang Shu-chuan (王淑娟) told a press conference.

Prices on certain services or goods, such as taxi fares, traveling expenses and childcare fees, usually climb during the Lunar New Year holiday period, Wang said, adding that excluding these factors, CPI growth was a moderate 1.6 percent last month.

In addition, rising vegetable prices was the other main reason leading to a higher growth in headline inflation, Wang said.

Vegetable prices spiked 42.03 percent last month from a year ago, as heavy rains cut supplies and drove up costs, further boosting headline inflation by 0.83 percentage points last month, the DGBAS report said.

Despite higher CPI growth last month, Wang said the nation’s overall inflation remains steady based on current data.

On Tuesday last week, the DGBAS forecast that the CPI would increase 1.29 percent this year from last year.

The DGBAS expected the annual growth in headline inflation to slow this month amid a higher comparison basis because of the Lunar New Year holiday period in February last year.

However, the agency said price hikes in gas, electricity and water would impact inflation, the agency said.

If the price of gas rises by 10 percent, for example, it would raise headline inflation by 0.31 percentage points, it said. A rise in the electricity price of 10 percent would bring CPI up 0.22 percentage points, the DGBAS data showed.

The wholesale price index rose 4.28 percent year-on-year last month, with domestic sales excluding imports, imported goods and exported goods increasing 0.69 percent, 7.6 percent and 4.35 percent respectively, the DGBAS said.

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