The recent rise in pork prices may boost headline inflation this month, Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Shih Su-mei (石素梅) said yesterday.
The wholesale price for hogs rose to a record-high last month after a large number of piglets died from a viral disease outbreak, Council of Agriculture data showed.
“The 10 percent year-on-year increase in wholesale pork prices will have a delayed effect on retail prices,” Shih said in a question-and-answer session in the legislature’s Finance Committee. “We think retail pork prices may start climbing this month.”
Shih said each 10 percent increase in pork prices would lead to a 0.1 percent rise in the consumer price index (CPI).
The CPI rose 0.39 percent in the first two months of the year, DGBAS data showed.
While official data showed relatively low inflation over the past two months, people have complained that the readings do not reflect reality, as dining out, for one, has become more expensive because of higher food prices.
Last month, the DGBAS forecast that inflation would grow by 1.07 percent this year.
However, central bank Governor Perng Fai-nan (彭淮南) said last week that inflation could grow at a faster pace than the DGBAS’ forecast, as the agency’s estimate had not taken into account a spike in pork prices after the outbreak of porcine epidemic diarrhea.
Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕) yesterday also questioned the accuracy of the agency’s forecast, while Democratic Progressive Party (DPP) Legislator Hsu Tain-tsair (許添財) urged the agency to adjust the composition of the CPI basket to better reflect reality.
The agency’s monthly shopping list includes 370 items, showing different trends in prices, Shih said, adding that increases in prices of non-durable goods usually have a stronger impact on the consumer.
Shih added that the government would do its best to reach the 3.2 percent economic growth target set by the National Development Council for this year.
Last month, the DGBAS estimated that GDP would expand by 2.82 percent this year.