COST OF LIVING/May CPI growth hits highest level in almost 10 years

06/07/2022 09:17 PM
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Diners are seen in the food court in the Taipei 101 shopping mall on June 5. In May, costs of dining out rose 5.8 percent from a year earlier. CNA file photo
Diners are seen in the food court in the Taipei 101 shopping mall on June 5. In May, costs of dining out rose 5.8 percent from a year earlier. CNA file photo

Taipei, June 7 (CNA) As Taiwan continues to face rising inflationary pressure, consumer price growth in May hit its highest level in almost a decade, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Tuesday.

On the back of growing food and fuel prices, the consumer price index grew 3.39 percent from a year earlier in May, the highest level since August 2012, when CPI growth stood at 3.42 percent.

Core CPI, which excludes fruit, vegetables and energy, rose by 2.60 percent from a year earlier in May, the DGBAS said.

On a month-on-month basis, Taiwan's CPI grew 0.24 percent and after seasonal adjustment rose 0.32 percent, the DGBAS added.

It was the third consecutive month Taiwan has reported a year-on-year CPI increase of more than 3 percent, well above the 2 percent alert set by the central bank.

In the first five months of this year, local CPI growth averaged 3.04 percent from a year earlier with core CPI up 2.33 percent, according to the DGBAS.

Analysts said the continued high level of CPI growth has turned the market more nervous about whether the central bank will raise its key interest rates again at the upcoming quarterly policymaking meeting scheduled for June 16 after a 50 basis point hike in March.

Higher food prices

Speaking with reporters, Tsao Chih-hung (曹志弘), a specialist at the DGBAS, said more expensive animal feed pushed up meat and egg prices and bad weather boosted vegetable prices in May, while a spike in international crude oil prices raised domestic fuel prices in the month.

In May, food prices rose 7.40 percent from a year earlier with the price of eggs and meat soaring 27.98 percent and 7.88 percent, respectively, year-on-year. In addition, the price of fruit, vegetables, and fishery items also surged 16.55 percent, 22.12 percent and 7.23 percent, respectively, from a year earlier.

In the month, dining-out expenses also rose 5.80 percent from a year earlier, further boosting overall food prices, which topped the 1.86 percent average monthly growth over the past decade, the DGBAS said. The 5.80 percent growth was also the highest in 13.5 years, the DGBAS added.

Commenting on soaring dining-out expenses, Tsao said the surge not only reflects the rise in food prices but also an increase in rent shouldered by food vendors and higher salary payments to their employees.

The public largely felt the effects of higher CPI growth due to soaring food prices, which accounted for about 25 percent of the CPI, according to the DGBAS.

Prices of fuel and household necessities

In May, transportation and communications costs rose 4.59 percent from a year earlier after fuel prices soared 12.62 percent year-on-year, the DGBAS data showed. According to the agency, fuel prices made up about 2.4 percent of the May CPI.

Last month, the cost of a basket of 17 government-monitored household necessities, including rice, pork, bread, eggs, sugar, cooking oil, instant noodles, shampoo, and toilet paper, rose by 5.25 percent from a year earlier, marking the second consecutive month growth has been above 3 percent after a 4.41 percent increase in April, the DGBAS data showed.

Meanwhile, the producer price index (PPI) rose 14.00 percent from a year earlier in May due to the higher price of oil and coal products, base metals, chemicals, drugs and electronics items, the DGBAS said.

The wholesale price index (WPI) surged by 16.62 percent from a year earlier in May, the highest growth in 41 years, according to the DGBAS.

The import price index rose 21.38 percent from a year earlier in May in Taiwan dollar terms, the highest growth in 42 years, and increased by 14.46 percent in U.S. dollar terms, while the export price index grew by 16.14 percent in Taiwan dollar terms and climbed by 9.50 percent in U.S. dollar terms, the data showed.

In the January-May period, Taiwan's PPI rose 12.30 percent from a year earlier with the WPI up 14.00 percent.

At the end of May, the DGBAS predicted CPI growth will peak in the second quarter before moderating in the third quarter. For 2022 as a whole, the DGBAS forecast that the CPI will grow 2.67 percent from the previous year, marking the highest growth in 14 years.

(By Pan Tzu-yu and Frances Huang)

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