The consumer price index (CPI) next year would rise above the 2 percent alert, and not decelerate as other institutes have forecast, because producers and retailers would pass mounting cost burdens on to customers, Academia Sinica said yesterday.
The inflationary gauge would be 2.04 percent next year, compared with 2.01 percent this year, as companies would boost selling prices to reflect rising costs, with the spillover effect extending to end consumers, Academia Sinica research fellow Ray Chou (周雨田) told an online news conference.
Academia Sinica is the only economic research institute in Taiwan to have forecast domestic inflation of more than 2 percent next year.
Photo: CNA
Persistently high wholesale price index readings support the view, Chou said, adding that other institutes fail to factor in housing price hikes, which would help drive up rent.
“Supply chain bottlenecks would linger and deteriorate, heaping inflation pressures on goods amid the rapid spread of virus infections caused by the Omicron variant” of SARS-CoV-2, Chou said.
Countries around the world have tightened border controls and bolstered disease containment measures as cases escalate and threaten medical capacity, he said.
Taiwanese policymakers continue to paint above-par CPI readings as transient and attributable to a low comparison base last year, he said.
They insist that things will normalize next year, even though the US Federal Reserve and the Bank of England have recognized that inflation merits monetary policy responses, he said.
Academia Sinica said that increasing home prices and payrolls would prompt landlords to raise rents.
Directorate-General of Budget, Accounting and Statistics (DGBAS) data have already showed upticks in rent rates in the past few months, it said.
A survey by Evertrust Rehouse Co (永慶房屋) found that house prices nationwide picked up by double percentage digits this quarter.
Developers have said they have to adjust prices to reflect spikes in labor, building material and land costs, while tile producer Champion Building Materials Co (冠軍建材) on Tuesday said that it would increase its prices by 8 to 15 percent.
Several restaurants and hotels, as well as manufacturers, have said that they had to take similar steps to remain profitable.
A CPI of more than 2 percent would not be all bad news, as it would foster economic expansion, Chou said.
A CPI growth figure near 1 percent would raise concerns about deflation, he said.
If the world can quickly gain control over Omicron outbreaks, uncertainty would subside, he said.
Academia Sinica projected that GDP growth would moderate to 3.85 percent next year, from an estimated 6.04 percent this year, due to a high comparison base this year.
The 3.85 percent projection is a conservative estimate compared with the 4.15 percent forecast by the DGBAS and the central bank’s 4.03 percent, while the latest GDP growth forecasts by major domestic think tanks were all above 4 percent.
Additional reporting by CNA
TRAGEDY STRIKES TAIPEI: The suspect died after falling off a building after he threw smoke grenades into Taipei Main Station and went on a killing spree in Zhongshan A 27-year-old suspect allegedly threw smoke grenades in Taipei Main Station and then proceeded to Zhongshan MRT Station in a random killing spree that resulted in the death of the suspect and two other civilians, and seven injured, including one in critical condition, as of press time last night. The suspect, identified as a man surnamed Chang Wen (張文), allegedly began the attack at Taipei Main Station, the Taipei Fire Department said, adding that it received a report at 5:24pm that smoke grenades had been thrown in the station. One man in his 50s was rushed to hospital after a cardiac arrest
A car bomb killed a senior Russian general in southern Moscow yesterday morning, the latest high-profile army figure to be blown up in a blast that came just hours after Russian and Ukrainian delegates held separate talks in Miami on a plan to end the war. Kyiv has not commented on the incident, but Russian investigators said they were probing whether the blast was “linked” to “Ukrainian special forces.” The attack was similar to other assassinations of generals and pro-war figures that have either been claimed, or are widely believed to have been orchestrated, by Ukraine. Russian Lieutenant General Fanil Sarvarov, 56, head
SAFETY FIRST: Double the number of police were deployed at the Taipei Marathon, while other cities released plans to bolster public event safety Authorities across Taiwan have stepped up security measures ahead of Christmas and New Year events, following a knife and smoke bomb attack in Taipei on Friday that left four people dead and 11 injured. In a bid to prevent potential copycat incidents, police deployments have been expanded for large gatherings, transport hubs, and other crowded public spaces, according to official statements from police and city authorities. Taipei Mayor Chiang Wan-an (蔣萬安) said the city has “comprehensively raised security readiness” in crowded areas, increased police deployments with armed officers, and intensified patrols during weekends and nighttime hours. For large-scale events, security checkpoints and explosives
PUBLIC SAFETY: The premier said that security would be tightened in transport hubs, while President Lai commended the public for their bravery The government is to deploy more police, including rapid response units, in crowded public areas to ensure a swift response to any threats, President William Lai (賴清德) said yesterday after a knife attack killed three people and injured 11 in Taipei the previous day. Lai made the remarks following a briefing by the National Police Agency on the progress of the investigation, saying that the attack underscored the importance of cooperation in public security between the central and local governments. The attack unfolded in the early evening on Friday around Taipei Main Station’s M7 exit and later near the Taipei MRT’s Zhongshan
RSS