Inflation last month edged up 0.23 percent annually, as increases in prices of eggs, dairy and medical care were offset by declines in prices of vegetables, garments, and communication and consumer electronics products, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The consumer price index (CPI) growth last month was much smaller compared with the whole of last year, when the index advanced 1.35 percent annually due to higher crude oil and tobacco prices, DGBAS Senior Executive Officer Hsu Chien-chung (徐健中) told a news conference in Taipei.
Tobacco prices rose last year due to a higher cigarette tax, which was implemented in September 2017, but prices are expected to stabilize this year, Hsu said.
Crude oil prices are expected to drop from an average of US$69.78 per barrel last year to US$61.90 this year, which should help keep inflation at bay, Hsu said.
The prices of eggs — including chicken, duck and preserved eggs — last month advanced 18.88 percent from a year earlier, posting the fastest growth in the food segment, the DGBAS said.
Chicken egg prices soared 23.16 percent year-on-year, Hsu said, adding that prices have been rising since August last year, with prices in December surging 40.88 percent after 1.3 million chickens died in floods on Aug. 23.
“As it takes time to raise egg-laying chickens, egg prices could not stabilize within a short period. However, the price hikes have begun narrowing since January and we expect prices to stabilize next month,” Hsu said.
On the other hand, as it took less time to raise broilers, chicken prices stayed flat from last year to last month, he said.
The average prices of vegetables dived 8.62 percent year-on-year, as persistently high production since December last year drove prices lower, Hsu said.
Overall, food prices, which comprise about 25 percent of the CPI weighting, posted a mild annual increase of 0.87 percent for last month, and annual growth of 0.85 percent for the first two months, he said.
It is difficult to forecast food prices for the whole year, as they tend to change quickly depending on weather conditions, Hsu added.
Core inflation, which excludes food and energy prices, rose 0.3 percent last month, hitting a 24-month low, the DGBAS said.
Hsu dismissed concerns about deflation, saying that core CPI growth remained positive.
Given lower oil product costs and steady tobacco prices, the DGBAS is sticking to its forecast of CPI growth of 0.73 percent, indicating mild inflation.
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