Wed, Aug 09, 2017 - Page 12 News List

Typhoons, heat drive 0.77% CPI increase

MILD INFLATION:Lower prices for computer products and telecommunication services helped mitigate the pain of higher food and medical costs, the DGBAS said

By Crystal Hsu  /  Staff reporter

The consumer price index (CPI) picked up 0.77 percent last month from a year earlier as two typhoons and hot weather pushed up vegetable prices, even though consumer electronics products cost less, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

The inflationary gauge edged up 0.21 percent last month after seasonal adjustments, suggesting stable consumer prices and giving the central bank room to hold monetary policy steady to support the economy.

Food costs, which account for 25 percent of the CPI weighting, gained 1.23 percent, driven mainly by a 7.03 percent increase in vegetable prices, the DGBAS report showed.

“The hot weather is unfavorable for growing vegetables and the two typhoons last month further disrupted supply,” DGBAS senior executive officer Jasmine Mei (梅家瑗) told a media briefing.

Fishery, milk and meat products helped raise food costs, with price hikes of 5.02 percent, 2.09 percent and 2 percent, while egg and fruit prices dropped by 13.4 percent and 10.9 percent, the report indicated.

On a month-on-month comparison, consumer prices rose a mere 0.01 percent, the report said.

Lower prices for computer products and telecommunication services helped mitigate the pain of higher food and medical costs, the report said.

Computer and smartphone vendors have cut prices for existing models to facilitate sales before introducing next-generation gadgets this month and next month.

Core CPI — a more reliable long-term tracker of consumer prices, because it excludes volatile items such as vegetables, fruits and energy — rose 0.92 percent from a year earlier, DGBAS data showed.

The wholesale price index (WPI), a measure of commercial production costs, last month fell 0.73 percent from a year earlier, narrowing from a revised 1.77 percent retreat, the report said.

Prices for raw materials and basic metal products fell in New Taiwan dollar terms as the local currency gained 5.55 percent against the greenback, the report said.

In US dollar terms, raw material, mineral and plastic products cost more last month from a year earlier, it said.

A stronger NT dollar is favorable for importers, but constrains profitability for exporters.

For the first seven months, the CPI gained 0.69 percent, while the WPI advanced 0.59 percent, the statistics agency said.

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