While the annual growth rate of the consumer prices was not likely to have changed last month from May, an uptrend will continue in the second half of this year as inflationary pressures remain from possible rising vegetable and fruit prices and the continued global demand for bulk commodities, experts said.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) is scheduled to release last month’s consumer price index (CPI) today, with the market forecasting annual growth to remain unchanged compared with May’s 1.66 percent increase.
“Last month, Taiwan’s headline inflation likely grew 1.7 percent from a year earlier, remaining stable from the previous month,” Cheng Cheng-mount (鄭貞茂), chief economist of Citigroup in Taipei, said in a research note issued on Friday.
Stable food prices and slightly lower gasoline prices were the main reasons that the CPI remained unchanged last month, Cheng said.
Recent decreases in global commodity prices would help ease inflationary pressure in the second half of this year, Cheng said. However, he added that this was unlikely to change long-term inflation.
Barclays Capital forecast that the nation’s inflation started worsening last month, with growth in headline readings likely to be more than 2 percent in the coming months on faded downward distortion from lower agricultural prices, it said in a research note yesterday.
“Last month, the weather over the agricultural regions of southern Taiwan became warmer and drier, potentially leading to rising fruit and vegetable prices, which account for 5.2 percent of the CPI basket,” Barclays said.
Given that these weather conditions might prevail in the coming months, the fruit, vegetable and rice prices would trend higher, Barclays added.
Chen Miao (陳淼), director of the macroeconomic forecasting center at the Taiwan Institute of Economic Research (台灣經濟研究院), agreed with the estimates made by Cheng and Barclays, saying that the nation’s inflationary pressures would maintain their rising pace on continuing strong demand on bulk commodities and unstable local weather conditions.
“Despite lower global commodity prices recently, we still see robust demand, which would continue to drive up prices in the second half of this year,” Chen said by telephone yesterday.
The price of fresh fruit might also remain high in the coming months and push up inflationary pressures, offsetting the effect of stable vegetable prices, Chen added.
The government forecast a 2 percent growth in inflation this year. In the first five months, the nation’s headline inflation indicator increased 1.36 percent from a year earlier, DGBAS data showed.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
RSS