Inflation slows further on stable food prices

DECLINERS::The wholesale price index dropped for the 16th straight month last month, as global prices for base metals, minerals and electronic components fell

By Amy Su  /  Staff reporter

Sat, Jul 06, 2013 - Page 13

Inflation last month posted its slowest increase in nearly one-and-a-half years, mainly due to stable food prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

The consumer price index (CPI) rose 0.6 percent last month compared with a year ago and an increase of 0.74 percent year-on-year in May, the lowest level of growth since February last year, the DGBAS said in its monthly report.

Core CPI — which excludes vegetable, fruit and energy prices — expanded 0.59 percent last month from a year ago, the report said.

“The slower growth in food prices helped contain the year-on-year expansion in headline inflation last month,” DGBAS senior executive Tsuei Chou-ying (崔洲英) told a press conference.

Food prices rose a mild 0.48 percent last month from a year earlier, marking their slowest increase since October 2010, as fruit and egg prices plummeted, Tsuei said.

Fruit prices shrank 11.74 percent last month from a year earlier because of peak harvests, while egg prices slid 8.82 percent, reflecting public concern over issues such as the bird flu and antibiotic residues, the report said.

Meanwhile, spending on eating out expanded 1.38 percent last month from a year ago — marking its slowest increase since May 2011, which also contributed to the slow growth in food prices, data showed.

Inflation in the first half of the year rose 1.31 percent from the same period last year, while growth in the second quarter stood at 0.8 percent, in line with the DGBAS’ forecast in May.

Although inflation has continued to slow over the past few months, it has not raised concern over prospects of deflation, Tsuei said.

As for wholesale prices, the index fell 1.9 percent last month from the same period last year, its 16th straight month of declines, the report showed.

The DGBAS attributed the downtrend to the recent decline in global prices of base metals, electronic components and mineral products.