Sat, Feb 08, 2014 - Page 14 News List

Taiwan’s inflation rate forecast to rise only 1.2%

Staff writer, with CNA

Taiwan’s consumer price index (CPI) for this year is forecast to rise no more than 1.2 percent despite a higher-than-expected increase last month, the Bank of America Merrill Lynch said.

Government statistics released on Thursday showed that Taiwan’s CPI for last month rose 0.76 percent year-on-year, higher than Merrill Lynch’s projection of 0.6 percent.

The CPI growth last month reflected higher demand for fish and meat products ahead of and during the Lunar New Year holiday, which started on Jan. 30 and ended on Feb. 4, the statistics indicated.

Merrill Lynch Hong Kong-based economist Marcella Chow (周奐彤) said that because the holiday started on Jan. 30 this year compared with Feb. 9 last year, it created a seasonal impact on food prices last month and a distorted base effect. The CPI will likely moderate this month, as food prices usually rise before the Lunar New Year and normalize afterward, Chow added.

“Looking ahead, inflation pressure will probably remain low, averaging 1.2 percent year-on-year in 2014, leading the Central Bank of the Republic of China (Taiwan) to keep the policy rate on hold for at least the first few months of the year to support GDP growth,” she said in a note to clients on Thursday.

The estimated CPI growth for this year would be higher than the 0.8 percent last year, but below the 1.9 percent in 2012 and 1.4 percent in 2011, she said.

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