Wed, May 09, 2018 - Page 12 News List

CPI nears 2% on stable economy

By Crystal Hsu  /  Staff reporter

The consumer price index (CPI) last month rose 1.98 percent from a year earlier as prices in the major consumer product categories all picked up amid a stable economy, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

Although the inflationary gauge approached the 2 percent alarm level, the agency dismissed concerns, saying that the base disruptions caused by steep tax hikes on cigarette prices would disappear in the fall.

“Consumer prices remain benign, despite a relatively high headline reading,” DGBAS Senior Executive Officer Jasmine Mei (梅家瑗) told a media briefing.

The central bank has said inflation rates of higher than 2 percent would merit consideration of monetary tightening moves to help stabilize consumer prices.

Of seven major consumer product categories, miscellaneous items reported a 5.43 percent gain as heavier tax burdens pushed up cigarette prices by 36.16 percent from a year earlier, the DGBAS said in a report.

The effect of tax hikes would taper off in October, allowing CPI values to resume normal movements, Mei said, adding that the inflationary gauge would increase only 1.54 percent if cigarette costs were excluded.

Food costs, which account for about 25 percent of the weighting, advanced 2.69 percent as vegetable, fishery and dairy product prices rose 7.76 percent, 3.97 percent and 3.26 percent respectively, it said.

Fruit and egg prices declined by 7.08 percent and 4.25 percent respectively in the absence of supply disruptions seen last year, it said.

Transportation and communication expenses rose 2.32 percent as oil product prices increased 12.08 percent, more than offsetting a 8.41 percent decline in telecommunications service charges, it said.

Living costs, comprised mainly of gas and electricity charges, picked up a mild 0.99 percent, even though the government raised gas and electricity rates last month, it said.

That is because most households were not affected by the rate adjustments, Mei said.

The CPI after seasonal adjustments edged up only 0.17 percent, while the core CPI, a more reliable indicator of long-term inflation because it excludes volatile items, rose 1.3 percent, it said.

The latest core CPI value lent support to stable consumer prices, Mei said.

The wholesale price index (WPI), a measure of commercial production cost burdens, rose 2.53 percent from a year earlier, buoyed by higher base metal, chemical, mineral, plastic and chemical prices, the report said.

For the first four months of this year, the CPI gained 1.65 percent, while the WPI edged up 0.53 percent, it said.

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