The consumer price index (CPI) last month rose 2.25 percent year-on-year, its fastest rise in 11 months, as service providers raised charges over the Lunar New Year holiday and fuel cost hikes neared 30 percent, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The inflationary gauge might stabilize slightly this month as holiday disruptions decrease, while an increase in energy costs is expected to linger due to a low base of comparison for the whole of last year, the statistics agency said.
“Babysitters, hairdressers, taxi drivers and retail service providers raised charges steeply over the Lunar New Year holiday in keeping with tradition,” DGBAS Deputy Director Tsai Yu-tai (蔡鈺泰) said at a news conference.
Together, miscellaneous expenses lifted CPI by 0.44 percentage points, while entertainment and educational costs contributed 0.3 percentage points, Tsai said.
The six-day holiday also spurred banquet and travel demands, driving food and transportation costs up 2.98 percent and 4.66 percent respectively, Tsai said.
Hotels, theme parks, restaurants and travel agencies raised rates to take advantage of spiking demand over the holiday.
Removing the holiday effect, CPI rose 1.61 percent, but declined 0.2 percent after seasonal adjustments, Tsai said.
Food costs remained the main driver, boosting the inflationary reading by 0.84 percentage points, followed by transportation and communication costs, which contributed 0.63 percentage points, Tsai said.
Fuel costs gained 27.13 percent as crude prices have climbed from US$26.5 per barrel last year to US$52.5 per barrel, Tsai said, adding that the base effect would remain in the absence of surprises.
Core CPI, a more reliable gauge of long-term inflation movements because it excludes volatile items, stood at 1.65 percent, more than double December last year’s level of 0.81 percent, Tsai said.
The central bank might step in and raise interest rates to ease inflationary pressures if core CPI readings rise higher than 2 percent, Tsai said.
The wholesale price index, a measure of commercial production costs, rose 2.72 percent year-on-year last month, its fastest pace of increase in five years, due to higher mineral, basic metal and chemical prices, Tsai said.
Import prices advanced 10.67 percent in US dollar terms, while export prices gained 4.67 percent, Tsai said.
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