Taiwan’s inflation cooled further at the start of the year, underscoring muted price pressures and giving the central bank room to remain patient as domestic demand holds steady.
The consumer price index (CPI) edged up 0.69 percent last month from a year earlier, marking the ninth straight month it stayed below the 2 percent alert threshold and the slowest pace in nearly five years, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
“The softer January reading was largely due to base effects,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei.
Photo: CNA
Last year’s Lunar New Year holiday fell in January, pushing up prices for certain goods and services, and inflating the comparison base, he said.
The agency expects inflation to edge back toward 2 percent this month, as the Lunar New Year holiday — running from Saturday next week to Feb. 22 — drives seasonal price increases at restaurants, hotels and recreational venues.
Even so, overall price conditions are likely to remain stable, the agency said.
Core inflation — which excludes volatile food and energy prices, and is seen as a better gauge of underlying price trends — rose 1.24 percent year-on-year, also comfortably below the 2 percent level.
Among the seven major CPI categories, miscellaneous items posted the largest annual increase at 1.99 percent, driven mainly by rising international gold prices.
Prices of personal items such as gold ornaments and jewelry surged 17.22 percent from a year earlier, Tsao said.
Housing-related costs rose 1.82 percent year-on-year, supported by a 1.99 percent increase in rent — the first time in nearly two-and-a-half years that rent inflation slipped below 2 percent.
Tsao attributed the moderation to easing increases in housing repair costs and a decline in the housing price index tracked by the Ministry of the Interior.
Still, households continued to feel pressure from the prices of daily necessities.
The prices of major staples rose 3.12 percent from a year earlier, the fastest pace in nearly two years, as egg prices jumped 18.31 percent and dining-out costs increased 3.08 percent, DGBAS data showed.
Falling prices for domestically produced goods — down 3.06 percent from a year earlier — should help ease cost pressures for restaurants, potentially pulling dining inflation below 3 percent in the coming months, Tsao said.
Meanwhile, the producer price index fell 2.01 percent last month from a year earlier, dragged by lower prices for agricultural products, petroleum and coal products, gas, chemicals and pharmaceuticals.
However, gains in electrical equipment, computers, electronic products and optical instruments offset part of the decline, the agency said.
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