Core consumer prices would top the list of concerns when the central bank revisits its monetary policy next month, as headline inflation has held steady while core readings continue to rise, Governor Yang Chin-long (楊金龍) said yesterday.
Yang shared his views on inflation and other economic issues while taking questions from lawmakers during a legislative hearing in Taipei, ahead of the central bank’s next board meeting on June 15.
Yang said his biggest concern is the core consumer price index (CPI), which advanced 2.72 percent last month, although headline inflation stayed unchanged at 2.35 percent.
Photo: CNA
Higher core CPI readings suggest sticky inflationary pressures ahead, Yang said, as the measure excludes volatile items such as fuel and vegetable prices.
If core CPI climbs higher, the central bank could raise interest rates again to tame inflation, although it would also take the nation’s economic health into consideration, he said.
Taiwan’s export-oriented economy contracted 3.02 percent during the January-to-March period and is expected to remain soft this and next quarter, as global inflation and monetary tightening slows demand for electronic components, the nation’s main export driver.
Taiwan has felt the pinch of economic uncertainty induced by aggressive interest rate hikes in the US and Europe, Yang said, adding that a recovery would take place in the fourth quarter, if not next quarter.
“Much depends on when inventory adjustments will end,” Yang said.
National Development Council Minister Kung Ming-hsin (龔明鑫) on Tuesday said that exports continue to disappoint, in line with conservative guidance from major tech firms that inventory corrections would persist into next quarter.
The Directorate-General of Budget Accounting and Statistics is on Friday expected to trim its forecast for Taiwan’s GDP growth this year, after exports and private investment fared weaker than expected.
Yang attributed Taiwan’s inflationary pressures to conspicuous rises in food, entertainment and travel charges in the wake of the government’s removal of border controls and other COVID-19 restrictions.
Dining costs, once risen, have little chance of falling before the year-on-year comparison effect fades, Yang said, responding to comments the central bank has failed to rein in inflation.
Taiwan’s inflation is moderate when compared with other countries, he said.
Yang said the US Federal Reserve is widely expected to end its rate hike cycle next month after inflation in the US fell below 5 percent and is expected to drop to the Fed’s 2 percent target by 2025.
The chance of further rate hikes is small against that backdrop, he said.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
A German company is putting used electric vehicle batteries to new use by stacking them into fridge-size units that homes and businesses can use to store their excess solar and wind energy. This week, the company Voltfang — which means “catching volts” — opened its first industrial site in Aachen, Germany, near the Belgian and Dutch borders. With about 100 staff, Voltfang says it is the biggest facility of its kind in Europe in the budding sector of refurbishing lithium-ion batteries. Its CEO David Oudsandji hopes it would help Europe’s biggest economy ween itself off fossil fuels and increasingly rely on climate-friendly renewables. While
SinoPac Financial Holdings Co (永豐金控) is weighing whether to add a life insurance business to its portfolio, but would tread cautiously after completing three acquisitions in quick succession, president Stanley Chu (朱士廷) said yesterday. “We are carefully considering whether life insurance should play a role in SinoPac’s business map,” Chu told reporters ahead of an earnings conference. “Our priority is to ensure the success of the deals we have already made, even though we are tracking some possible targets.” Local media have reported that Mercuries Life Insurance Co (三商美邦人壽), which is seeking buyers amid financial strains, has invited three financial
RSS