The consumer price index (CPI) last month accelerated 2.84 percent year-on-year, while core CPI climbed 2.42 percent to a 13-year high, as retail prices rose ahead of the Lunar New Year holiday, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The inflation gauge has been above 2 percent for several months and that trend is set to continue, the statistics agency said.
The latest data give hawkish board members at the central bank more leeway to push for interest rate increases, while others consider higher inflation amid a robust economy acceptable.
Photo: CNA
“Domestic retail prices, which remain under pressure, keep rising, although the wholesale price index [WPI] lost some momentum,” DGBAS official Tsao Chih-hung (曹志弘) said.
The WPI, a measure of commercial production costs, advanced 10.83 percent, down from a revised 12.46 percent gain in December, Tsao said.
Many companies have passed the increased costs on to customers to stay profitable.
Core CPI, a more reliable long-term price tracker because it excludes volatile items, would still have risen 2 percent even after stripping out the influence of the holiday, the DGBAS said.
Transportation and communication prices posted the steepest advance of 5.19 percent, attributable to a 16.77 percent spike in international fuel prices and a 13.38 percent upswing in domestic airfares, it said.
Tensions between Russia and Ukraine helped drive up oil prices, Tsao said.
The cost of food, which has the largest weighting in the CPI, rose 3.75 percent, as bad weather elevated fruit prices by 21.41 percent, while egg and fishery prices jumped 15.62 percent and 5.28 percent respectively year-on-year, he said.
In particular, the cost of eating out increased 3.87 percent, the biggest rise in seven years, he added.
Prices of miscellaneous items picked up 2.76 percent, mainly because people had to pay extra for babysitters, hairdressers and other service providers, which is normal during the Lunar New Year holiday, Tsao said.
Likewise, travel agencies and leisure facilities also raised their rates over the holiday, bolstering entertainment and recreational prices by 2.06 percent, he said, although tightened COVID-19 controls amid revived outbreaks curtailed demand somewhat.
The cost of living rose 1.73 percent, as home repair costs increased 6.29 percent and rents rose 0.97 percent, the DGBAS said.
Rent increases have drawn the attention of the central bank, as they are connected to housing affordability and higher inflation that could lead to social instability.
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