Inflationary pressures accelerated last month from a year earlier as price hikes in food and clothing more than offset a decline in energy costs, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The consumer price index (CPI) advanced 1.07 percent last month, compared with an annual increase of 0.71 percent in September, as food costs climbed faster, especially for people who eat out, DGBAS Deputy Director Tsai Yu-tai (蔡鈺泰) told a news conference yesterday.
The index on the food category gained 3.33 percent mainly due to steep rises in egg, meat and fishery product prices, even though vegetable prices fell 6.01 percent, the agency’s report showed.
Processed food and dining costs rose 5.43 percent and 4.24 percent respectively, the report said.
The pickup in inflationary pressures came even though oil prices weakened 7.74 percent, the fastest pace of decline in 62 months, reducing transportation and communications costs by 1.68 percent, Wu said.
The core CPI, which is more reliable in tracking long-term inflationary trends, as it excludes volatile vegetable and energy costs, rose to 1.61 percent from 1.55 percent in September, the report said, inching closer to the 2 percent alarm level.
As of last month, the inflationary gauge averaged a benign 1.3 percent, the report said.
The wholesale price index (WPI), a measure of production costs, dropped 1.15 percent from October last year on the back of falling prices for fuel, electronics and optical products, the report said.
For the first 10 months of the year, WPI pared a tiny 0.11 percent, from the same period last year, the report said.
The receding production costs, a trend that will probably continue for a while, are likely to allow the central bank more room to keep interest rates unchanged, foreign institutes said.
“Given the latest CPI data and the sharp fall in international oil prices, monetary policymakers might choose to ignore signs of better growth data,” thereby delaying interest rate changes till next year, said Tony Phoo (符銘財), a Taipei-based economist at Standard Chartered Bank.
Phoo said that the central bank is planning to raise interest rates next month, but added that there are growing risks connected to the forecast.
Barclays Capital pushed back its rate hike call by one quarter to March next year after the economy fared weaker than its projection last quarter.
The ongoing cooking oil scandal might also take a larger toll on GDP, said Leong Wai Ho (梁偉豪), Barclays’ Singapore-based senior economist.
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