Taiwan’s consumer price growth last month slowed to its weakest pace in more than four years, providing further evidence that inflationary pressures are easing and allowing room for monetary policy flexibility.
The consumer price index (CPI) rose 1.37 percent from a year earlier, representing the smallest year-on-year increase since May 2020 and staying below the central bank’s 2 percent target for the second consecutive month, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said.
The slowdown was due to stable weather, which tempered gains in fruit prices, and a high base effect from June last year, when the Dragon Boat Festival drove up food and service costs, the statistics agency said.
Photo: CNA
“Price levels are broadly stable,” DGBAS official Tsao Chih-hung (曹志弘) said, adding that while inflation could edge higher this month due to seasonal factors, it is likely to remain under 2 percent through the second half of the year.
Core CPI, a more reliable long-term price tracker because it excludes volatile food and energy components, rose 1.47 percent, remaining below the 2 percent mark for the 15th straight month, Tsao said.
The subdued inflation reading eases pressure on the central bank to hold onto a tight monetary policy stance and might allow it to maintain current interest rates to support GDP growth amid external uncertainties.
Among the seven major categories, food prices posted the highest annual gain of 2.82 percent, led by an 8.56 percent surge in fruit prices, the agency said.
Meat prices and the cost of dining out rose 4.54 percent and 3.44 percent respectively, but egg prices fell 8.5 percent, softening the overall impact.
Prices for miscellaneous goods rose 2.21 percent, driven by jewelry, tobacco and betel nut prices, it said.
Healthcare inflation stood at 1.89 percent amid higher registration and ward fees, the agency said.
Housing costs increased 1.76 percent mainly on rent and household service charges, it said.
In contrast, transportation and communications costs fell 1.36 percent, as global oil price weakness pushed fuel prices down 8.16 percent, the DGBAS said, adding that airfares slid 5.89 percent, while auto repair costs rose 2.73 percent.
Meanwhile, the producer price index (PPI), a measure of the price movements of goods from a seller’s perspective, last month fell 5.47 percent, widening from a revised 4.34 percent drop in May.
The retreat reflected prevalent declines in global commodity prices, including oil, chemicals, metals and electronics, and the local currency’s rapid advance against the greenback, the DGBAS said.
For the first six months of this year, CPI increased 1.93 percent, while PPI edged up 0.27 percent from the same period last year, it said.
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