The consumer price index (CPI) last month contracted 0.97 percent from a year earlier, weighed down by slumping crude oil prices and recreation costs as the COVID-19 pandemic hurt demand, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The inflationary gauge has staggered into the negative zone for three straight months and the latest drop, while mild, represented the deepest retreat in more than a decade, the statistics agency said.
“I do not see signs of deflation, as the CPI continued to pick up after stripping fuel and gas prices,” DGBAS Senior Executive Officer Chiou Shwu-chwen (邱淑純) told a media briefing in Taipei.
Photo: Cheng Chi-fang, Taipei Times
Crude oil prices, in particular, plunged 35.5 percent, the steepest decline since the launch of the survey in 1982, and underpinned an 8.56 percent fall in transportation and communication costs, Chiou said.
Prices once touched US$12 a barrel before recovering to US$18, similar to levels seen in 1999, she said.
Demand for oil products might gain traction going forward, as countries around the world look to reopen their economies following weeks of lockdown to combat the virus’ spread, Chiou said.
Education and entertainment costs slid 1.8 percent last month, the DGBAS report showed.
Hotels cut room rates by 15.44 percent, while travel agencies lowered group tour charges by 4.6 percent, in hopes of motivating domestic customers in the absence of foreign tourists, it said.
The CPI reading after seasonal adjustments shrank 0.72 percent. The core CPI posted a marginal 0.05 percent increase.
The data helped quash deflation concerns, Chiou said.
Food costs rose 1.27 percent year-on-year due to double-digit percentage gains in fruit prices, which more than offset lower costs for vegetables and other food items, the report said.
Garment prices rose 1.63 percent as retailers offered fewer discounts for spring and summer wear, it said.
The wholesale price index (WPI) last month slumped 10.75 percent from a year earlier, widening from a revised 7.43 percent fall in March, as prices for minerals, base metals, petrochemicals and plastics tumbled further amid sluggish demand.
Import prices subsided 14.66 percent, while export prices weakened 8.74 percent, the report said.
For the first four months of the year, the CPI edged up 0.17 percent and the WPI posted a 6.51 percent fall, it said.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
Luxury hotel Mandarin Oriental Taipei (文華東方酒店) yesterday announced that it would suspend guestroom operations and lay off related staffers from Monday, as regional border controls and travel restrictions are unlikely to be lifted anytime soon. The partial shutdown would not affect the five-star hotel’s restaurants, bars, spa, and conference and banquet facilities, which this month have almost recovered to pre-pandemic levels, it said. “Mandarin Oriental Taipei will suspend all guestroom services from June 1 due to the impact of the COVID-19 pandemic,” the hotel said after four months of maintaining normal operations proved unsustainable. The change necessitates downsizing and the hotel is handling