Fri, Dec 06, 2013 - Page 13 News List

Price index likely to accelerate

THE VEGETABLE EFFECT:The recovery of the supply of vegetables was insufficient to keep their prices down, and the pace of CPI growth may accelerate as a result

By Amy Su  /  Staff reporter

Annual growth of the consumer price index (CPI) may accelerate this month, after expanding by less than 1 percent over the past seven-straight months, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

DGBAS did not provide an exact figure for this month’s inflation reading. Last month, the agency forecast the nation’s CPI to rise 1.12 percent this quarter from a year earlier.

Barclays Capital predicted that inflation would pick up at an average of 1.8 percent next year as the economy improves.

“This should set the stage for the central bank to consider normalizing [monetary] policy from the second half of next year,” Leong Wai Ho (梁偉豪), a senior regional economist with the British banking group, said in a research note.

The headline inflation reading rose 0.67 percent last month compared with a year ago, following a 0.64 percent year-on-year increase in October, DGBAS said in its monthly report. In the first 11 months of the year, CPI rose 0.83 percent.

Growth in core CPI — which excludes vegetable, fruit and energy prices — expanded at a slower pace last month at 0.2 percent from a year ago, compared with an increase of 0.15 percent in October, the report said.

DGBAS Deputy Director Tsai Yu-tai (蔡鈺泰) said the lower-than-expected growth in CPI last month was because of a rise in vegetable prices.

“Despite the continued recovery of vegetable supply over the past two months, their average price [last month] still showed a growth from the same period last year,” Tsai told a press conference yesterday.

Last month, vegetable prices surged 19.33 percent from a year earlier, sending the headline inflation reading up by 0.4 percentage points, the report said.

The relatively high cost of vegetables also raised the food sector’s annual growth in price to 2.7 percent last month, marking the largest increase among the seven major sectors surveyed by DGBAS.

Capital Securities Corp (群益證券) said the mild rising pace in headline inflation this year indicated that the slowing growth in prices of global agriculture and food ingredients offset the impact of the rise in food prices.

Meanwhile, the wholesale price index (WPI) extended its trend of year-on-year contractions last month, falling 0.95 percent from the same period last year, its 21st-straight month of decline, DGBAS data showed. WPI has dropped 2.64 percent in the first 11 months of this year.

However, even with stable inflation, the public may still feel mounting price pressure as the average price of goods that are purchased at least once a month increased 1.72 percent last month from a year earlier, DGBAS said.

The average price of nondurable goods — mostly essential goods — also grew 1.58 percent year-on-year last month, the data showed.

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