The consumer price index (CPI) last month declined 1.19 percent from a year earlier, the fourth consecutive month of drops, as lower oil prices and recreational costs continued to offset increases in the prices of food and miscellaneous items, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said in a report yesterday.
Although the latest CPI data represented the biggest drop in more than a decade, the DGBAS shrugged off concern over deflation, saying that things would return to normal after restrictions on large social gatherings are lifted tomorrow.
The negative CPI readings are related to the COVID-19 pandemic and oil prices, factors that have stabilized, DGBAS Senior Executive Officer Chiou Shwu-chwen (邱淑純) told a media briefing in Taipei.
Taiwanese have avoided non-essential activities for the past four months to help stem the spread of the novel coronavirus, efforts that have paid off as shown by the lack of new cases in the past few weeks, Chiou said.
“There is no need to worry about deflation as long as the economy continues to grow and the virus crisis dissolves,” she said.
Starting next week, people will resume dining, shopping and domestic trips, Chiou said, adding that government stimulus in the form of coupons for all Taiwanese and their foreign spouses would encourage spending next month.
Hospitality and recreation companies, which have been the hardest hit by the pandemic, have offered generous discounts to attract customers and magnify the spending effect.
For the first five months, CPI softened 0.11 percent, while the wholesale price index fell 7.56 percent, it said.
Transportation and communications costs last month fell 8.53 percent from a year earlier, dragged mainly by a 35.28 percent plunge in fuel prices, the report showed.
Education and entertainment costs shrank 1.69 percent due to downward adjustments of domestic tour and hotel charges, it showed.
Travel agencies cut domestic tour fees by 15.76 percent to draw customers, while bans on international travel remain in place.
Food costs picked up 0.3 percent, with fruit and meat prices gaining 3.25 percent and 2.13 percent respectively, offsetting declines for vegetables, it said.
Prices for miscellaneous items grew 0.87 percent on the back of more expensive jewelry and accessories, it said.
Core CPI rose 0.08 percent, indicating stable consumer prices, Chiou said.
The wholesale price index, the gauge for commercial production costs, fell 11.6 percent, widening from a revised 10.95 percent retreat one month earlier, the agency said.
Prices for chemical, mineral and base metal products remained weak due to sluggish demand, it said.
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