The recent fuel price increases will start weighing on the headline inflation rate from this month and drive up full-year inflation by 0.24 percentage points, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
DGBAS announced yesterday that annual growth in the consumer price index (CPI) stood at 1.21 percent last month, compared with 0.23 percent in February.
“Rising vegetable prices were the main factor driving up the growth of CPI last month,” DGBAS section chief Wang Shu-chuan (王淑娟) told a press conference.
Vegetable prices increased 30.74 percent last month from a year earlier due to heavy rains that cut supplies and drove up costs, contributing 0.53 percentage points to the 1.21 percent growth in the CPI, the DGBAS said in a report.
This further drove up overall food costs by 3.1 percent, the highest growth of the seven main sectors surveyed by the DGBAS, the report said.
However, the price of meat fell 2.95 percent last month from the previous year, indicating the bird flu outbreak and the controversy over US beef imports may have lowered consumers’ demand for meat-related products, Wang said.
After the Ministry of Economic Affairs scrapped restrictions on fuel price increases on Sunday, which led to state-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) raising gas prices by almost 10 percent, Wang said the price rises would raise the headline inflation index by 0.24 percentage points this year.
Wang said it was too early to evaluate its impact on the CPI of electricity prices, which may also be raised by the ministry in the near future, as it remains uncertain how big any price rise would be.
However, if electricity prices are raised 10 percent, it would raise full-year CPI by 0.22 percentage points, with the direct and indirect impact standing at 0.356 percentage points, Wang added.
Although Wang refused to specify if the fuel price increases would deepen inflationary pressures this year, she said “any price increases pass some negative feelings to the public.”
In the first three months, consumer prices rose 1.26 percent from a year ago, lower than the 1.4 percent growth forecast by the DGBAS.
The DGBAS will update its full-year forecast for the consumer price index at the end of this month, from its early estimate of 1.46 percent.