CPI up 1.61% last month

By Amy Su  /  Staff reporter

Tue, Jan 08, 2013 - Page 13

The consumer price index (CPI) rose 1.61 percent last month from a year earlier, bringing the headline rate of inflation to 1.93 percent for last year, in line with a previous forecast by the government, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

Last year’s headline rate of inflation marked the highest level since 2008, but was still under the 2 percent threshold set by the government.

“Although typhoons and heavy rains raised vegetable and fruit prices between July and September, the pace of the rise slowed in the following months,” DGBAS section chief Wang Shu-chuan (王淑娟) told a press conference.

This, as well as the slowing economic sentiment that dragged down momentum in private consumption, kept full-year growth in headline inflation at a level under 2 percent, Wang added.

However, food costs increased 4.16 percent last year, marking the fastest growth among the seven main sectors surveyed by the DGBAS, and the highest level in four years, the agency said in its monthly report.

The annual growth in prices of non-durable goods also reached its highest level since 2008, rising 4.46 percent last year, which was a major factor affecting consumers.

For last month, the 1.61 percent year-on-year growth of consumer prices was faster than the 1.59 percent recorded in November last year, the report’s data showed.

Growth in core CPI — which excludes vegetable, fruit and energy prices — also expanded to 1.09 percent last month from a year ago, its highest level since January last year, leading to uncertainty over consumer prices for this year.

Tony Phoo (符銘財), a Taipei-based economist at Standard Chartered Bank, also said the imminent hikes in medical fees and expenses, as well as the possibility the government will further raise both fuel and electricity prices, could impact the rate of inflation.

“The government expects headline inflation to slow considerably to a mere 1.27 percent growth this year, which we believe will be rather challenging to achieve,” Phoo said in a research note.

The wholesale price index (WPI) dropped 3.96 percent year-on-year last month, with the index sliding 1.16 percent last year, the DGBAS’ report said.