Taiwan’s consumer price index (CPI) last month rose 1.25 percent from the same month last year, the slowest pace in four-and-a-half years and below the government’s 2 percent alert level for a fifth straight month, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
DGBAS official Tsao Chih-hung (曹志弘) said that the moderation reflected favorable weather, tax cuts on new vehicle purchases and a high comparison base due to the timing of Mid-Autumn Festival last year.
“After the middle of August, stable weather conditions allowed for smooth vegetable replanting, easing food prices,” Tsao said. “Meanwhile, lower commodity taxes on newly purchased cars and aggressive discounting by automakers brought down costs.”
Photo: CNA
The timing of the Mid-Autumn Festival in September last year, which fell in October this year, also helped temper the annual increase, he said.
CPI this month is likely to remain at about the same level, as mild weather would offset upward pressure from higher electricity prices following a rate hike that took effect on Wednesday last week, he said.
The rate increase is expected to have only a minimal impact, adding about 0.01 percentage points to inflation and 0.04 percentage points next year, as the adjustments mainly target residential users and small businesses, Tsao said.
The latest power rate adjustments would likely add a negligible burden to small vendors of about NT$70 per month on average, he added.
Core CPI — the central bank’s preferred gauge that strips out energy, vegetables and other volatile items — rose 1.46 percent from a year earlier, the slowest growth in seven months, DGBAS data showed, suggesting subdued underlying price pressures.
Although Typhoon Ragasa struck last month, damage from the storm was largely confined to eastern Taiwan and caused limited agricultural losses, so prices were not affected much, Tsao said.
Still, prices of daily necessities continued their ascent. The CPI for key livelihood items climbed 2.47 percent, the sharpest increase in 18 months, driven by an 8.74 percent jump in pork prices and a 5.94 percent gain in egg prices.
Pork demand typically spikes ahead of the Ghost Festival, which this year was early last month, but has since eased, Tsao said.
Global conditions also point to continued price stability. Crude oil prices remain relatively low, while Taiwan’s import price index continues to fall, easing input costs for manufacturers, Tsao said.
The producer price index (PPI), a measure of the price movements of goods from a seller’s perspective, contracted 3.73 percent last month, dragged down by declines in chemical, petrochemical, metal and electronic components, the DGBAS said.
In the first nine months of this year, the CPI climbed 1.77 percent from a year earlier, while the PPI retreated 1.53 percent over the same period.
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