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COST OF LIVING/CPI growth hits 7-month high, topping 2% in August

09/06/2023 11:03 PM
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A shopper on Wednesday checks a cabage at a market in Kaohsiung, which is priced at NT$125 (US$3.9) each. CNA photo Sept. 6, 2023
A shopper on Wednesday checks a cabage at a market in Kaohsiung, which is priced at NT$125 (US$3.9) each. CNA photo Sept. 6, 2023

Taipei, Sept. 6 (CNA) Taiwan's consumer price index (CPI) registered the highest year-on-year growth in seven months, breaching 2 percent largely on the back of higher rising food and fuel prices, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Wednesday.

Data compiled by the DGBAS showed the CPI rose 2.52 percent from a year earlier in August, well above the 2 percent alert set by the central bank, the first time the level was breached in three months after 1.75 percent in June and 1.88 percent in July.

In addition, the August CPI growth was the highest since January, when inflation stood at 3.05 percent, the data indicated.

The year-on-year growth in core CPI, which excludes fruit, vegetables and energy, also topped 2 percent at 2.56 percent in August, according to the DGBAS.

On a month-on-month basis, the CPI rose 0.55 percent in August and after seasonal adjustments, the index also rose 0.18 percent, the DGBAS said.

In the first eight months of this year, CPI growth hit 2.29 percent with core CPI growth at 2.66 percent, the DGBAS added.

Aug. 8: Inflation stays below 2% alert level for 2nd consecutive month in July

Aug. 18: DGBAS cuts Taiwan's GDP growth forecast for 2023 to below 2%

Speaking with reporters, Tsao Chih-hung (曹志弘), a DGBAS specialist, said heavy rain brought by a typhoon boosted vegetable prices in August, while a spike in international crude oil prices pushed up fuel prices in the month.

In August, food prices rose 3.46 percent from a year earlier with the price of vegetables, meat, frozen foods, grains and related items, and fishery foods rising 13.33 percent, 5.79 percent, 4.65 percent, 4.49 percent and 3.18 percent, respectively, while the cost of eating out also grew 4.26 percent, the DGBAS said.

However, fruit prices fell 8.28 percent from a year earlier in August due to a relatively high comparison base over the same period of last year, which capped food price growth, the DGBAS added.

Transportation and communications expenses grew 1.68 percent from a year earlier in August with fuel prices soaring 4.32 percent in line with crude oil price hikes, the DGBAS added.

Aug. 8: Damage caused by Typhoon Khanun estimated at NT$154.72 million

Sept. 4: Taiwan's agricultural losses from Typhoon Haikui top NT$250 million

The DGBAS said domestic consumption remained strong in the post COVID-19 era, which pushed up entertainment and education expenses by 3.62 percent, adding that the growth also reflected rising demand for travel in the summer vacation.

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 4.20 percent from a year earlier in June, after a 4.66 percent increase in April, the DGBAS said.

The August growth in the price of the 17 household necessities was the lowest since March 2022, when the increase hit 3.77 percent, as prices of eggs, chicken and cooking oil moved lower from a year earlier, Tsao said.

Tsao said since Taiwan was hit by a typhoon in early September, it is likely that the CPI will continue to remain above 2 percent, but entertainment and education costs could move lower following the end of the summer vacation.

Meanwhile, the producer price index (PPI) for August fell 0.06 percent from a year earlier due to a fall in the cost of oil, coal, chemical materials, base metals and drugs during the month, but the decline in those prices was partially offset by increases in electricity rates, more expensive agricultural products and a falling Taiwan dollar, the DGBAS said.

Sept. 5: Forex reserves fall for 1st time in 11 months on market intervention

The import price index fell 3.66 percent from a year earlier in August in Taiwan dollar terms and also dropped 8.89 percent in U.S. dollar terms, while the export price index fell 0.80 percent in U.S. dollar terms and also shed 6.20 percent in Taiwan dollar terms, the data showed.

In the first eight months of 2023, Taiwan's PPI fell 0.68 percent from a year earlier, according to the DGBAS.

As major central banks around the world continue to tighten their monetary policies, raw material prices have showed signs of moving lower, which pushed the PPI lower for five consecutive months in a row in August, helping Taiwan combat imported inflation, Tsao said.

In mid-August, the DGBAS forecast that local CPI will grow 2.14 percent from a year earlier in 2023 but inflationary pressure is expected to fall in the fourth quarter with grow forecast to be 1.93 percent.

(Pan Tzu-yu and Frances Huang)Enditem/AW

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