The consumer price index (CPI) edged down 0.56 percent last month from the same period a year earlier as lower fuel prices continued to drag the inflationary gauge, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The contraction appeared to have narrowed for two months, compared with the revised declines of 0.74 percent in May and 0.82 percent in April, as distortions from international crude oil prices taper off, the agency’s data showed.
Of the major consumption categories, transportation and communications costs reported the biggest decline of 5.41 percent last month from a year earlier, as fuel prices fell by 23.19 percent.
Fuel prices last month tumbled by more than 20 percent for the seventh consecutive month, dragging down the CPI by 0.87 percentage points, DGBAS Deputy Director Tsai Yu-tai (蔡鈺泰) said.
In other words, the inflation reading would have inched up by 0.31 percent last month in the absence of oil price disruptions, Tsai said, dismissing deflation worries.
The CPI after seasonal adjustment remained in positive territory with a 0.17 percent gain, the agency said in a report.
Food costs increased 1.92 percent last month, driven by a 10.75 percent pickup in vegetable prices amid hot and rainy weather, the report said.
Meanwhile, egg and fruit costs dropped by 13.03 percent and 3.41 percent respectively, easing the hikes in food prices, the report said.
Core CPI, a more reliable inflationary reference, because it excludes volatile items, registered a 0.57 percent increase last month, virtually unchanged from the revised 0.59 percent uptick in May, a confirmation of benign consumer pressure.
Still, the consumer activity tracker dropped 0.7 percent last quarter, steeper than the agency’s forecast of a 0.54 percent decline.
Tsai attributed the gap to a weaker global economy, which lowered demand for raw materials and crops.
For the first six months of the year, the CPI dropped by 0.65 percent from a year earlier, while core CPI grew by 0.87 percent year-on-year, the report indicated.
The wholesale price index (WPI), a measure of commercial production costs, took a dive of 9.3 percent last month from the same period last year, compared with the revised 9.59 percent reduction in the May reading, the report said.
The report attributed the falling WPI to export prices, which dropped 9.3 percent, while import costs plummeted 13.66 percent last month from the same period a year ago.
The DGBAS said it would be hard to project the CPI trend going forward due to potential disruptions by tropical storms and typhoons that might damage crops and boost their prices.
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